Mark McLaughlin looks at the ‘excepted assets’ rule, which restricts the amount of inheritance tax business property relief available in certain circumstances.
Many business owners will be counting on the availability of business property relief (BPR) when they need it. BPR offers inheritance tax (IHT) relief of 100% (or 50%) on a transfer of value attributable to ‘relevant business property’ such as shares in an owner-managed or family company (which potentially qualify for 100% BPR).
The ‘money box’ trap
However, there is an important restriction in BPR for ‘excepted assets’. This rule is aimed at preventing the exploitation of BPR in respect of non-business assets.
For example, a family trading company owner might desire BPR on their private wealth. They use cash to subscribe for additional shares in the
