Postby LozaACCS » Sat Dec 03, 2016 9:17 pm
My rationale for the BPR route is based on the size of the estate and the age of the parents, at 84 it may be pretty futile to be transferring assets between each other, either as lifetime transfers or on death.
The reason for forming a company is that you (or your parents control it),so it cannot go bust on you,(thus avoiding the AIM issue), the problem with EIS relief is that a holding in excess of 30% does not qualify for income tax relief, but this rule does not apply to CGT.
Therefore applying the mantra that 2 years is better than 7, there is a planning route available.
To get BPR the company must have received capital and invested it in the business within the stipulated period (see Sch 5B TCGA 1992), this can then be sheltered after 2 years using BPR, APR would probably be unattractive on the basis that your parents would not be thrilled at the prospect of running a farm for 2 years.
So the logic is to introduce capital to the new company by selling one or more flats, any gains can be deferred using Sch 5B and the monies received can be used to subscribe for shares in the new company which will qualify for 100% BPR if you get the planning right.