Mark McLaughlin looks at an inheritance tax business property relief anti-avoidance rule that can result in a relief restriction.
Business property relief (BPR) offers inheritance tax (IHT) relief of 100% or 50% on a transfer of value attributable to ‘relevant business property’.
For example, unquoted company shares potentially qualify for 100% BPR, subject to certain general restrictions where the company’s activities consist wholly or mainly of dealing in stocks or shares, land or buildings, or making or holding investments.
The small print
There are certain conditions to secure BPR. In addition, there are anti-avoidance rules to prevent the relief being abused, including the ‘excepted assets’ rule (IHTA 1984, s 112). If ‘caught’ by this rule, BPR is restricted by the value attributable to the