Business property relief

In this lesson

1. 0:00 Business property relief overview
2. 1:23 Ownership requirements and spouse rules
3. 2:03 Investment restrictions on BPR
4. 3:14 Joyce's shares transfer illustration
5. 4:56 Calculating chargeable lifetime transfer
6. 5:16 Exam tips for business property relief

About this lesson

Business property relief is a crucial inheritance tax relief available on sole trader interests, partnership shares, unquoted trading company shares, and business-used land, buildings, and plant and machinery. You'll discover the relief rates (100% for small businesses, 50% for larger businesses and land and buildings), the two-year ownership requirement, and how to handle situations where business property has been replaced or passed from a spouse. The video walks you through the key restriction that catches many students: investments held within a company reduce the relief available. You'll see how to calculate restricted business property relief using the formula of relevant business assets divided by total assets, multiplied by the transfer value. This is essential for Advanced Taxation (ATX) exam questions where HMRC deliberately includes investment holdings to test whether you can spot when relief is limited. Using a worked example with Joyce's transfer of shares to a trust, you'll learn how to identify qualifying business property, apply the correct relief percentage, handle the restriction for investments, and calculate the chargeable lifetime transfer after relief. The lesson emphasises the practical exam skill of spotting investments in business questions—a common trap where examiners test whether you understand that investment assets don't qualify for full business property relief.

Duration: 6m