Business Property Relief Schemes

For an increasing number of people the idea of having to pay death duties such as Inheritance tax (IHT) is an issue they are concerned about.

It is possible to reduce your estates liability to IHT, but the concept of using various forms of trust arrangements or gifting their assets away may not seem ideal.

Business Property Relief (BPR) schemes are an alternative method to inheritance tax planning, whilst still allowing the individual to gain access to their capital if required. These types of schemes invest into unquoted companies that qualify under the rules relating to Business Property Relief.

Unlike some gifts and simple transfers, which generally take seven years before they’re fully exempt from Inheritance tax, an investment in a BPR scheme if held for more than two years as at the date of death is exempt from inheritance tax, providing the company meets BPR ‘trading’ criteria.

Unlike some other solutions, you retain access to your investment. If your circumstances change and you want to dispose of your holding, you can – although money withdrawn may not be shielded from inheritance tax.

These types of investments can be complicated and some products are considered high risk so it is very important that you seek independent advice to ensure this approach to planning is suitable for you.

Past performance is no guide to the future, you may not get back the full amount invested.

This information is based on our current understanding of the revenues tax treatment using Business property relief and could be subject to change in the future.

If you would like more information on this type of investment please feel free to contact us