Key points
- Relevant business property can include unquoted shares in a company to qualify for business property relief.
- For a transfer of shares to be eligible for capital gains tax holdover relief a company’s activities must not be comprised of ‘substantial’ non-trading activities.
- Gifting shares into a relevant trust as a chargeable lifetime transfer may be an option.
- Business asset disposal relief may be at risk when non-trading activities are substantial.
It is too simple an assumption that property or cash which does not form part of the ‘trading’ assets of a trading company or corporate group will always prejudice the key trading business reliefs for its shareholders.
Inheritance tax business property relief (BPR) and capital gains tax holdover relief and business asset disposal relief (BADR) do not necessarily work in the same way.
This article considers a confectionary business called Chocolat Ltd. Its proprietor and sole shareholder Vianne is...