What is ‘Business Property Relief’…?

19 Sep What is ‘Business Property Relief’…?

Inheritance Taxis often named as one of the UK’s most hated taxes. While there are a number of ways to reduce your eventual tax bill, many people are unaware of Business Property Relief.

Business Property Relief (BPR) allows relief from inheritance tax at a rate of 50% or 100% on certain business assets.

You can get 100% BPR on a business or interest in a business, while 50% BPR is available on:

• shares controlling more than 50% of the voting rights in a listed company;
• land, buildings or machinery owned by the deceased and used in a business they were a partner in or controlled;
• land, buildings or machinery used in the business and held in a Trust that it has the right to benefit from.

It’s important to remember that you can only get BPR if the person who has died owned the business or asset for at least two years before they passed away. You also can’t claim BPR if the asset is not needed for future use in the business.

What’s more, business assets can actually be given away while the owner is still alive and qualify for BPR. However, certain criteria needs to be met – for example, the recipient must keep them as a going concern until the death of the donor.

Clearly, timing is extremely important when it comes to BPR, so plans should ensure it’s available at the relevant time.

BPR can make a huge difference to the eventual inheritance tax bill of your loved ones and can also help with succession planning. However, it requires careful planning in order to ensure it is available when you need it. 

Dictating exactly what happens to your assets after you die is incredibly important, whether you own a business or not, and a Will is the best way to do that. It is also the best way to reduce further uncertainty and upset your loved ones would face after you pass away. 

Heir Tight Wills helps clients put in place robust provisions and valid documents, to protect their loved ones and their assets – both business & personal – both during their lifetime and after their death.  For a FREE Consultation to discuss writing or updating your Will & estate planning provisions, contact Rachael Rodgers on 0845 519 7585, or CONTACT US via email.