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An at a glance guide. Subscribers, click here for your detailed guide to this topic and a summary of relevant case law.

At a glance

Business Property Relief (BPR) provides relief from Inheritance Tax (IHT) on the transfer of relevant business assets at a rate of 50% or 100%.

Relevant business property comprises of:

Type Rate of relief

A business or an interest in a business.

100%

Unquoted shares, including shares listed on the Alternative Investment Market (AIM)

100%

Unquoted securities which on their own or combined with other unquoted shares or securities give control of an unquoted company

100%

Quoted shares which give control of the company

50%

Land or buildings, machinery or plant used wholly or mainly for the purposes of the business carried on by a company or partnership

50%

Land or buildings, machinery or plant available under a life interest and used in a business carried on by the beneficiary

50%

 

Relevant property must be held for at least two years in order to qualify for relief.

Pitfalls and planning points

Sole traders

Partners

Directors

Business activities

BPR is not available in respect of a business, or shares in a company that is:

There is no BPR if the business or company is one of "wholly or mainly" in dealing in securities, stocks or shares, land or buildings or in the making or holding of investments.

A business which only generates investment income will not attract BPR, so this excludes:

Some business activities are borderline: whether they will qualify for relief depends on the nature of services provided, typically these include:

Certain activities are regarded as trading:

 Links to our useful guides:

IHT Business Property Relief
A guide to what Business Property Relief is, when it can apply and pitfalls and planning points.

Agricultural property relief 
Agricultural Property Relief (APR) is a relief for Inheritance Tax (IHT). This guide provides an outline of APR with links to case law.

Woodlands
Woodlands and forestry ownership carry significant tax reliefs, including income tax, capital gains tax and inheritance tax relief. This is a guide to those reliefs.