Two conditions have to be satisfied for business relief to be available in calculating the (additional) tax chargeable by reason of the transferor’s death within seven years of the transfer. Both conditions refer to the property which was relevant business property ( IHTM25141) in relation to the lifetime transfer ( IHTM14000) (the original property). The original property must
Where the value transferred is greater than the value of the
property transferred, relief is available for the whole of the loss
to the transferor’s estate (
IHTM04054), including the depreciation
in the value of property retained by the transferor, if the
additional conditions are satisfied in relation to the
Because the additional conditions operate by reference to the original property, relief would be lost unless the transferee had retained the gifted property and that property was still relevant business property at the date of death. To alleviate this, IHTA84/S113B provides for the additional conditions to be satisfied where the transferee has replaced ( IHTM25369) the gifted property with other business property.