BPR, WHAT IS IT?

and why do you need to know about it?

Business Property Relief (BPR) is a valuable tax relief that can significantly reduce Inheritance Tax (IHT) liability for those who own qualifying business assets. If you are a business owner or a beneficiary of a business owner’s estate, it’s essential to understand the benefits of BPR and how it can help to preserve your wealth for future generations.

In simple terms, BPR provides relief from IHT on qualifying business assets, allowing them to be passed on to the next generation without incurring tax liabilities. For instance, if a couple owns a business, and they both pass away, the value of their business will not be included in their estate for IHT purposes if it qualifies for BPR. This means that their beneficiaries will not have to pay any tax on the value of the business, allowing them to inherit it tax-free. A business must meet specific HM Revenue & Customs (HMRC) criteria to qualify for BPR. In general, the business must be a trading company or a business mainly engaged in trading activities. The definition of trading activities is broad. Holiday parks are one example of businesses that may not automatically qualify for BPR. HM Revenue & Customs often start from the position that holiday parks can be considered investment businesses where income is derived from the passive holding of land and receiving rent. However, holiday parks can qualify for BPR if they can demonstrate added value by providing additional services that turn the business from an investment to a trading business.

Providing additional services such as sewerage management, a shop, a restaurant, electricity, wi-fi, and water can help demonstrate that a holiday park is engaged in trading activities.

In conclusion, BPR is a valuable tax relief that can significantly reduce IHT liabilities for qualifying business assets. It’s important for business owners to

Less Tax

understand the criteria for qualifying for BPR and to take steps to ensure that their business activities meet these criteria. For beneficiaries, BPR can help preserve the estate’s wealth, allowing them to inherit valuable business assets without incurring significant tax liabilities.

If you want to know more, Burnside Chartered Accountants offer a professional consulting service, specialising in BPR for your industry.

To find out exactly how we can help call:

0845 071 7676

Bristol Office:

61 Queen Square, Bristol BS1 4JZ

Bishop’s Stortford Office:

Thremhall Park, Start Hill, Bishop’s Stortford CM22 7WE

If you have any questions please contact us at: enquiries@ burnside.biz