IHTM25141 - Relevant Business Property: Investigating Relevant Business Property


Business relief is due to the extent that the value transferred by the transfer of value is attributable to "relevant business property", IHTA84/S104 (1). When you investigate the detailed provisions for business relief, you should start by considering if the property transferred comes within one of the categories of "relevant business property" in IHTA84/S105 (1).

For deaths and transfers on or after 6 April 1996, there are seven categories of property which are capable of qualifying as relevant business property. They are (broadly):

CategoryRate of relief
  • property consisting of a business or interest in a business ( IHTM25151)
100%
  • control holdings of unquoted securities ( IHTM25171) in a company
100%
100%
  • control holdings of quoted shares ( IHTM25201) in a company
50%
  • land, buildings, machinery or plant ( IHTM25221) used by a company controlled by the transferor or by a partnership of which the transferor was a member
50%
  • settled land, buildings, machinery or plant ( IHTM25241) in which the transferor had an interest in possession and used in his business (This applies to lifetime transfers only).
50%

These rates of relief

  • apply to deaths and chargeable transfers and events on or after 6 April 1996, except where stated.
  • include charges or further charges of IHT arising on a death on or after that date in respect of lifetime transfers ( IHTM14000) of value made before that date. However if the lifetime transfer was of unquoted shares in a company ( IHTM25191) and the transfer was chargeable when made, the higher relief introduced from 6 April 1996 applies only for the purpose of calculating the second tax charge by reference to the transferor's death. The value for cumulation remains as calculated at the time of the transfer by reference to the rate of relief applying at that time.

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