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Business Property Relief

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Business Property Relief
In the United Kingdom, the reduction or elimination of inheritance tax on the transfer of some types of property used for business purposes. For example, shares in unquoted companies in which the transferor had majority control are not subject to an inheritance tax because of business property relief. Likewise, land and machinery used primarily for a business before the transfer are taxed at half the ordinary rate.


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AYou are referring to the exemption under Business Property Relief, which means that if you held a qualifying investment for two years or longer the investment receives a 100% relief against inheritance tax.
Other benefits of using will trusts include protecting family property in the event of divorce of the beneficiaries and ensuring that full business property relief is used for spouses who are joint owners of a company.
AOnce you have run the guest house for two years it's likely that it will qualify for 100% Business Property Relief for inheritance tax purposes, providing you are still using it as a guest house when you die.
 
 
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