Mark McLaughlin warns that a ‘deathbed’ inheritance tax planning arrangement can have unfortunate consequences if not handled correctly.
‘Deathbed’ inheritance tax (IHT) planning should be avoided where possible. It is often difficult, and also potentially risky because if the planning backfires it will probably be too late to do anything about it.
BPR and the two-year rule
For example, business property relief (BPR) is an important IHT relief for business owners. BPR broadly reduces the value of transfers of certain types of business property by a specified percentage (i.e., 100% or 50%), depending on the type of property.
BPR is subject to certain conditions, including that the business property is owned by the transferor throughout the two years immediately preceding the transfer.
This two-year ownership
