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Readers’ forum: How would trust legacy be dealt with?

06 May 2024
Issue: 4935 / Categories: Forum & Feedback , Inheritance Tax , Trusts

Would BPR be disallowed?

A prospective client’s husband died last month. He owned shares in a trading company for more than two years at the date of death so business property relief should be available. His will leaves ‘property eligible for business property relief’ in trust with the remainder of his assets passing to his spouse. The company is currently sitting on £3m in cash and we have not yet carried out a valuation of the company for probate purposes but the question raised is that if HMRC disallowed BPR on all or some of the cash how would the trust legacy be dealt with?

Is it possible to transfer 75% of the husband’s shares into trust if HMRC decided that 25% of the company value does not qualify for BPR or does the whole gift fail on the basis that it is not possible to separate out the non qualifying...

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