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Where Taxpayers and Advisers Meet

Business Property Relief - Unquoted Shares

DavidFraser
Posts:16
Joined:Wed Dec 13, 2017 3:33 pm
Business Property Relief - Unquoted Shares

Postby DavidFraser » Mon Feb 26, 2018 12:09 pm

I have a client whose late husband was a director of a private company and after he died she inherited his shares in that company. Before she married she worked as a secretary for the company. Family members of the company have recently offered to buy back her shares at an agreed amount on her death provided she signs an assurance to this effect. If the value of the shares should increase between now and her death, she will still only get the amount agreed now.

I believe that, although she has no controlling share of the company, on her death the value of the shares will be covered by Business Property Relief as they are unquoted shares and not subject to an IHT charge. Is my thinking correct please?

Surtax

RMC
Posts:435
Joined:Wed Aug 06, 2008 3:35 pm

Re: Business Property Relief - Unquoted Shares

Postby RMC » Mon Feb 26, 2018 12:49 pm

Your thinking is wrong - getting BPR on death is of no benefit whatsoever to the deceased.

DavidFraser
Posts:16
Joined:Wed Dec 13, 2017 3:33 pm

Re: Business Property Relief - Unquoted Shares

Postby DavidFraser » Mon Feb 26, 2018 1:44 pm

Apologies that my question was misleading. My client is anxious that if she accepted the company's offer for her shares that her estate would not be liable to an IHT charge.

Surtax

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

Re: Business Property Relief - Unquoted Shares

Postby AGoodman » Mon Feb 26, 2018 2:28 pm

BPR may well apply, she does not need to work for the company and she will inherit her late husband's holding period. The company must meet the usual qualifications such as trading and having no significant non-trading assets.

Bear in mind that a binding contract for sale will nullify the BPR. She may therefore want to try to structure this arrangement as put and call options which either party can exercise following her death.

DavidFraser
Posts:16
Joined:Wed Dec 13, 2017 3:33 pm

Re: Business Property Relief - Unquoted Shares

Postby DavidFraser » Mon Feb 26, 2018 6:57 pm

Thank you AGoodman for you advice regarding a binding contract and the put and call option.


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