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Two tribes

05 February 2013 / Paul Howard , Ian Maston
Issue: 4389 / Categories: Comment & Analysis , Business , Capital Gains , Companies , Income Tax
Business property relief or entrepreneurs’ relief? PAUL HOWARD and IAN MASTON aim to make sure you pick the winning side


  • Two generous tax reliefs but with different rules.
  • A comparison of the “trading” requirements.
  • Which assets are eligible for the two reliefs?
  • Do not confuse periods of ownership and “use”.
  • Relief is available for group companies and joint ventures.

Inheritance tax business property relief (BPR) and capital gains tax entrepreneurs’ relief (ER) are both available in relation to shares in “trading” companies and individuals holding such shares are likely to want to rely on one or other of these reliefs at some point.

If the shares are sold ER will be needed; if the shares are given to the next generation both reliefs could be useful; and if the shares are retained until death BPR would reduce the potential inheritance tax liability.

Both reliefs exist...

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