IHT BPR - mental block

IHT BPR - mental block

Didn't find your answer?

I suspect I've got an enormous mental block at the moment. Can't see round it and I'm sure I'm missing something!

X controls an unquoted company. His partnership (his interest in which qualifies for relief under s105(1)(a)) uses land and buildings owned by the company. The company simply lets property (third parties pay rent ) so the shares in the company do not qualify for BPR under s105(1)(bb) because they fall foul of s105(3).

If the situation were reversed and the company carried on the business that is carried on by the partnership, and X owned the property, IHTA 1984 s105(1)(d) would give BPR at 50% on the property used by the company.

I can't see that in the current situation any relief is due. I can't find anything that allows a "look through" ie because X controls the company, he can be treated as owning the property for BPR purposes, so that relief is due at 50% because his partnership uses the property in its trade.

What am I missing?

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By blok
15th Nov 2012 11:44

.

on the facts provided the company is not trading, its holding an investment property, so the shares wont qualify. but the interest in the trading p'ship would qualify.

the best answer would be to have the partnership trade in the company and the value of the property and the trade would qualify for 100% bpr. (assuming no other significant investment activity in the company)

I think you're right though - there is no look through.

 

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By MJShone
15th Nov 2012 19:07

Thanks blok

Good to know I'm not entirely mad! (Either that or we both are.)

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