Sole trader incorporates and goodwill, etc... paid for by a DLA. Will the DLA become an asset for IHT?
Not sure if it would fall under BPR.
Thanks for any comments
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yes
the DLA remains a debt in his estate and does not attract BPR...quid pro quo for going this route rather than share exchange...naturally the value of the shares is reduced however as they would have attracted BPR bit of a double whammy..
Don't think theres any proximity relief for this but stand to be corrected...
Can be immediately rectified
The DLA can be 'capitalised' by way of a rights issue of (say) redeemable preference shares - 100% BPR may immediately be available if done properly with the required paperwork.
For an example of how not to go about this, see the recent case of Wilton Antques Ltd concerning Mary Dugan-Chapman who subscribed for 1m shares two days before she died.
If the DLA is large enough, it would be worth looking into this further.