Business property relief: reform on the horizon?

We are expecting a major shake up of the inheritance tax (IHT) system on 30 October with a move from a domicile-based system to a residence-based one. Given the focus of press coverage on this and other changes to the taxation of ‘non-doms’ UK domiciled individuals who are long-term UK residents might be forgiven for thinking their IHT position won’t be affected by the upcoming Budget.

However advisers have long thought business property relief (BPR) is at risk of being restricted and the government could take the opportunity on Budget day to add this to its list of tax changes. In this article we will explain how BPR currently works explore what changes might be made to the existing relief and consider what effect this could have on family businesses. Statutory references are to IHTA 1984 unless specified otherwise.

What is BPR and...