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Where Taxpayers and Advisers Meet

Time limits for BPR

sharpener
Posts:74
Joined:Wed Aug 06, 2008 3:34 pm
Time limits for BPR

Postby sharpener » Tue Feb 07, 2017 2:38 pm

I have an EIS investment which is due to mature shortly. As it has been held for 3 years it qualifies for Business Property Relief.

I also have had a managed AIM portfolio (with a different provider) for more than 2 years so everything in it is exempt from IHT. If I were to reinvest the proceeds of one into the other what steps do I need to take to ensure I maintain continuity of BPR and avoid re-setting the 2 year clock?

TIA

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Time limits for BPR

Postby AGoodman » Wed Feb 08, 2017 5:02 pm

As your current assets already qualify, you just need to reinvest within 3 years, although obviously the relief would be lost if you had not reinvested at the time of your death.

There is no particular requirement requiring you to be able to trace the cash through but it would be clearer if you made a transfer of the proceeds from EIS to your portfolio manager.

AG

sharpener
Posts:74
Joined:Wed Aug 06, 2008 3:34 pm

Re: Time limits for BPR

Postby sharpener » Fri Feb 10, 2017 6:28 pm

Thanks for that (sorry for the delay, I didn't get any notification of yr reply for some reason). Now I can see how the 2 yrs in 5 rule applies in practice(!)

If I go down this route I will in the light of your comments try and get the EIS manager to remit the funds directly to the AIM portfolio manager (and instruct them to invest without undue delay). Latest news is that the EIS fund may now be going to reopen to new investment in April - but this is not soon enough to accept the payout in February. So for BPR purposes I still need an alternative home to minimise the short-term risk on death, though not for CGT as in that instance it falls away.


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