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Is it 'the business'?

15 November 2006 / Peter Legg
Issue: 4084 / Categories: Comment & Analysis , Inheritance Tax
PETER LEGG provides an overview of the factors relevant to inheritance tax business property relief.

THERE ARE MANY issues that an individual considers when setting up a business; but in the heady days at inception one of the main thoughts may not necessarily be relief from inheritance tax on the lifetime gift of the business or on the death of the proprietor. However as the business progresses and hopefully becomes more successful and possibly diversified the ability to claim inheritance tax business property relief ('BPR') should not be overlooked.
This article summarises the factors that must be taken into account to determine whether a claim to business property relief is likely to succeed. (All references are to IHTA 1984.)

The relief

BPR effectively reduces the value of a transfer of value by the donor of 'relevant business property' either by 100% or 50%. The categories of 'relevant business property' are shown in the Table below together with the...

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