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Where Taxpayers and Advisers Meet

RNRB & Business Relief

Joined:Thu Aug 16, 2012 1:45 am
RNRB & Business Relief

Postby adamh » Thu May 02, 2019 4:21 am

My home is worth about £2m and I separately have about £2m in business relief assets.

My will leaves my estate mostly to my son. Would my estate be eligible for the RNRB if I pass away soon?

Joined:Fri May 16, 2014 3:47 pm

Re: RNRB & Business Relief

Postby AGoodman » Thu May 02, 2019 10:09 am

No, I'm afraid BPR isn't taken into account when calculating the £2m threshold for RNRB

Joined:Thu Aug 16, 2012 1:45 am

Re: RNRB & Business Relief

Postby adamh » Thu May 02, 2019 7:16 pm

Thank you for your reply.

Is this the case even if the business relief has been successful (it was held for more than two years) and is therefore not considered part of the taxable estate?

Joined:Wed Feb 08, 2017 2:33 pm

Re: RNRB & Business Relief

Postby AnthonyR » Thu May 09, 2019 11:17 am

For the purposes of taper relief, the value of the estate is calculated before taking into account any reliefs, including Business Relief. So even if the assets qualify for BR for IHT purposes your assets are still £4m for the taper calculation.

This is considered per person, so if you were married and it's possible to equalise assets between you and your spouse then this may give you £2m each. The complication then comes where the first of you dies and leaves the assets to the other, so careful planning needs to be undertaken at that stage (possibly leaving the BR assets into a specific trust).

It's also worth noting that failed PETs (ie gifts within 7 years of death) are not considered for the purposes of taper relief, so depending on if you can gift assets this may offers some opportunities to plan.

As with most things, bearing in mind the potential IHT saving, it's worth paying some money and having a chat with an adviser who understands these things and can provide you with specific advice.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP

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