IHT liability on inherited BPR-qualifying asset

[davidxt]

An elderly relative has an EIS investment that qualifies for BPR. It has been held for 2+ years so falls outside his estate for IHT purposes.
Upon his death all of his assets, the total of which which exceed the IHT allowance, will pass to his wife.

If at that time his wife has already died, it is clear that this asset will not be liable for IHT and will pass untaxed to the next beneficiary of his will.

But if she survives him and inherits the BRP-qualifying asset, please can anyone help me understand if that BPR-qualifying asset will maintain its IHT exemption when her estate is subsequently assessed for IHT?

That is to say when eventually her estate is assessed and be found to exceed 2x the IHT limit, will the BPR element that has been inherited from the husband be included in the amount upon which IHT is charged?

Thanks for any help

[maths]

In short, yes.

On her death the period of ownership of her husband is included with that of her's. Hence , BPR applies on her death [IHTA 1984 s108(b)].

[davidxt]

Thank you for that reference, it is most helpful