One of the enjoyable things about tax work is occasionally being able to save someone a lot of money with one or two sheets of paper. A good example is in relation to IHT business property relief – see Example 1.
This dichotomy in business property rules is somewhat strange and the rationale for it is not clear. But if all the interest in the land is contributed as part of the capital account of the partner concerned there will be no capital gains tax disposal. Apparently it is acceptable for partnership property to be allocated to one partner only. So the transfer into the partnership may appear to be the easy solution to the inheritance tax issue.
But sadly nothing in tax is that easy. Stamp duty land tax can be something of a spanner in the works and Mr Moon...
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