Business property relief for development land

KEY POINTS

• The importance of differentiating trading companies and dealing in land.
• Do not overlook the capital gains tax and other implications of property transfers.
• When will inheritance tax business property relief be available on shares in a land development company?
• Care is needed to ensure that the activity should not be regarded as a ‘fake land’ dealing activity.
• Shares in a property development company should qualify for relief.

With so many property development opportunities facing landowners in the UK it is important for tax advisers to understand what qualifies as a trading company and what qualifies as a company ‘dealing in land’ for tax purposes. Part of this review must be to consider the most tax-effective business structure for development land. Whether the ordinary shares in a company dealing in...