BPR Products

Business Relief (formerly known as Business Property Relief) reduces the value of business property for inheritance tax. It's available on the transfers of business asset during lifetime or on death. To qualify the business asset must usually have been owned throughout the two years prior to death or transfer.

Relief is given to ensure that following the death of a business owner, a family-owned business can survive as a trading entity without having to be sold or broken up to pay an inheritance tax liability. But it's also available to private investors who invest in qualifying businesses.

Types of Assets Covered

100% Relief: This level of relief applies to a whole business or an interest in a business, as well as shares in companies that are not listed on any stock exchange.
50% Relief: This level applies to specific assets like land, buildings, or machinery that the deceased owned and were used in a business they had a stake in or controlled.

Ownership Period

For an asset to qualify for BPR, it must have been owned for a minimum of two years before the owner's death. This is a crucial criterion and failing to meet it can result in the asset not qualifying for the relief.

Exclusions

Not all businesses or assets qualify for BPR. For example, businesses primarily involved in investment activities, or those dealing mainly with securities, stocks, or shares, are generally not eligible for BPR.

Benefits of Using BPR Investments

Inheritance Tax Mitigation

One of the most compelling benefits of BPR is its potential to significantly reduce or even completely eliminate the inheritance tax liability on qualifying business assets. This can result in substantial savings for the heirs.

Business Continuity

BPR can play a pivotal role in ensuring that a family-owned business stays within the family. By reducing or eliminating the inheritance tax burden, heirs are less likely to be forced to sell the business to cover tax liabilities.

Investment Opportunities

For investors, BPR offers an attractive avenue for inheritance tax planning. By investing in BPR-qualifying shares, you can potentially shield these investments from inheritance tax, making them a valuable component of a diversified portfolio.

Age and Ownership Limits

Age Limits: BPR does not have specific age restrictions, making it a flexible option for people of all ages.
Ownership Limits: The key requirement is that the asset must be owned for at least two years before the owner's death

Tax Rules in the United Kingdom

Inheritance Tax: The primary aim of BPR is to reduce the inheritance tax burden on qualifying assets.
Capital Gains Tax: It's important to note that BPR does not offer any relief from Capital Gains Tax.

Additional Considerations

Risk: Investing in smaller, unlisted companies for BPR purposes can carry higher risks compared to other types of investments.
Liquidity: Some BPR-qualifying investments may not be easily convertible to cash, making them less liquid.
Legal Complexity: The rules and regulations surrounding BPR are intricate and subject to change, making it essential to stay updated and seek professional advice.

Business Property Relief in the United kingdom

Business Property Relief offers a valuable opportunity for both business owners and investors to mitigate inheritance tax liabilities. However, the rules are complex, and the financial stakes are high.

For more information or to discuss your individual circumstances, feel free to contact us.

Note: This page is for information purposes only and should not be considered as financial advice. Always consult an Independent Financial Adviser for personalised financial advice tailored to your individual circumstances.

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