Shares in an unquoted trading company qualify for 100% business
property relief (BPR) against IHT, regardless of the level of the
shareholding. The principal condition is that the shares must have been
owned for at least two years prior to death (or to a lifetime transfer).
This being the case, the value of the shares will not form part of the
deceased taxable estate.
Personally owned assets that are used in the business of a limited
company controlled by the individual also attract BPR, but at a rate of
50%. The assets must have been owned for at least two years for the
relief to be available, although the individual need not have controlled
the company during all that period.
Assets with 100% business property relief can be passed on as a
specific legacy without incurring a liability to IHT. Alternatively,
they may be used to expand beyond £255,000 the value to be included
within a discretionary will trust.
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