Tax tip: business and agricultural property reliefs

Business property relief (BPR) and agricultural property relief (APR) are arguably the most generous reliefs in the inheritance tax code each (subject to some exceptions) giving 100% relief for the value of the asset in the estate. Such reliefs should therefore be protected and maximised wherever possible.

Assets which qualify for BPR and/or APR should therefore be left in the will to a chargeable beneficiary wherever possible – ie not to a spouse or charity. There is no point wasting BPR or APR on a legacy which is already exempt from inheritance tax.

Other options

If this is not practical – for example if there is a good commercial reason for the surviving spouse to continue to hold shares in the family farm or the family trading company – then consideration should be given to leaving cash (or other non-relievable liquid assets) to the surviving spouse and the...