IHT Liability

[Imran_Akhtar]

Hi There,

I have a general inquiry about Inheritance Tax liability. My Mother currently owns a house in London which is estimated to be valued at £330,000 and a Freehold business property which is a Off License Store in Central London valued at around £700,000. This equals to around £1,030,000 in total.

My Father passed away in 1990 and his Inheritance Tax Threshold was unused which means my Mothers £325,000 can be doubled to £650,000 to allow the estate to be tax free on that amount and the remainder £380,000 be eligible for 40% inheritance tax.

My Query was would her business be eligible for Business Relief to allow the business to be passed on to the children (Me and my two siblings) tax free? If not what would be the best course of action from here. Any advice will be much appreciated.

Regards,

Imran Akhtar

[maths]

I assume your mother runs the business as a sole tradership in which case BPR is likely to be available at 100%.

[Imran_Akhtar]

I assume your mother runs the business as a sole tradership in which case BPR is likely to be available at 100%.

Sorry for late reply was away for a while. Thank you for your response.

Well my Brother is running the business as a sole trader and mum owns the business if that makes sense; she is getting rent every quarter?

So its all within the family.. If you can shed some light on this it would be much appreciated.

Kind Regards,

Imran Akhtar

[maths]

Presumably mother owns the freehold property and brother runs the business ie mother is not involved other than to let the property?

[Imran_Akhtar]

Presumably mother owns the freehold property and brother runs the business ie mother is not involved other than to let the property?

Hi there, Yes she owns the Freehold property and yes brother runs the business.. She is not involved in the day to day running...

[Imran_Akhtar]

Bump, can anyone please contribute to the above query...

Regards,

Imran Akhtar

[okevin]

As it stands there is no relief available to mother.

Could the mother introduce the property to the business, ring fencing the value in her capital account. Bpr at 50% would then be available on the Partnership asset.