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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To preserve business property/ agricultural property relief - if all assets are left to a surviving spouse on the first death, the availability of business property relief and/or agricultural property relief could be wasted, as the assets will pass exempt to the surviving spouse in any event.
However, as a business asset this should be eligible for 100 per cent agricultural property relief or business property relief.
IF you are making a gift of a business asset to a son or daughter, remember to claim Business Property Relief from Inheritance Tax.
When considering the value of your estate for these purposes, you need to ignore any Inheritance Tax reliefs, such as Agricultural Property Relief (APR) and Business Property Relief (BPR), which can be claimed on farm land or business assets.
But, taking advantage of business property relief, further reliefs applying to farms and woodlands, plus the family trusts will likely mean little if any IHT is ultimately due.
Business property relief can apply to directly-held AIM shares which are not in property, finance, mining or exploration companies.
He said:: "The quickest way of making a significant dent in your inheritance tax liabilities is to invest in assets that qualify for Business Property Relief (BPR), as this will give you relief from inheritance tax after just two years.
He did not, however, have the space to extol the virtues of investing in assets that qualify for Business Property Relief (BPR), which is another effective way of reducing inheritance tax liabilities.
Business assets may also qualify for an exemption known as business property relief.
Single Payment does qualify for Business Property Relief if the owner is also a working farmer and has held the SP for more than two years.
Retain business property relief to encourage entrepreneurs to continue investing in and developing businesses, including family-run firms.
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