I'm just trying to get my head a potential issue with a soft loan asset in a trading company, and in particular how it impacts on BPR for the parent if at all. I think there is a real prospect of HMRC concluding it is not for business purposes (no interest charged and to a family member). The trading subsidiary is clearly trading, so it doesn't seem to be an issue with Section 111 IHTA 1984 and the holding company will qualify for BPR under Section 105(4)b). However, down the group structure is the non-trading asset - how, if at all, does it operate to restrict the available BPR under Section 112? Is part of the holding company's value attributed to it and excepted from IHT? I've tried the HMRC IHT Manual but could not see an obvious answer.
11th Jun 2021
Effect of excepted assets in a subsidiary on BPR
Do excepted assets in a subsidiary operate to limit BPR on the holding company's shares?
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