A and B operate a trading partnership that has for many years rented premises owned by A's parents, M and D.
Our client D is very ill but reasonably active at present. He is unlikely to survive more than a few months.
If M and D become partners with A and B with say a 1% profit share, will this mean that the premises will attract 50% business property relief for IHT purposes on D's death?
The premises have been owned for more than two years and used by the A and B partnership throughout, but only by the A, B, D and M patnership for a very short period.
John R
Replies (3)
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Unfortunately, I don't think so....
because of IHTA 84 S105(6) which says that such property is only relevant business property if the partnership interest is also relevant business property.
As (presumably) the father will have been a partner for less than two years at the date of death that would blow the availability of relief as I see it.
Why does D not gift his share of property to M?
No CGT , SDLT or IHT. M can join the partnership and will enjoy 50% relief as soon as she has survived 2 years.
Too simple?