Business Property Relief (BPR) Schemes

What is Business Property Relief (BPR)?

Business Property Relief (BPR) represents a vital component in the United Kingdom's inheritance tax planning landscape. This specialized relief is designed to substantially reduce, or in some cases, eliminate inheritance tax (IHT) liabilities on certain business assets. Particularly crucial in the context of business property relief IHT, BPR offers not just a financial advantage for business owners, but also peace of mind for their beneficiaries, ensuring smoother transitions in estate planning and the preservation of business legacies.

Key Features of BPR Investments

Types of Assets Covered

  • 100% Relief: This significant level of relief applies to entire businesses or interests in businesses, as well as shares in non-listed companies. It's a major consideration for business owners and investors alike.
  • 50% Relief: Applicable to specific assets such as land, buildings, or machinery owned by the deceased and used in a business in which they had a stake or exerted control.

Ownership Period

A cornerstone criterion for BPR eligibility is the ownership duration. Assets must have been under the owner's possession for a minimum of two years before their passing. This rule underscores the importance of timely estate planning.


BPR doesn't blanket all business types. Particularly, businesses primarily involved in investment activities, dealing in securities, stocks, or shares, typically don't qualify for BPR. Understanding these exclusions is key to effective asset planning.

The Business Property Relief 2 Year Rule

The two-year holding period for BPR eligibility is a critical factor in inheritance tax planning. This requisite timeframe highlights the need for foresight and strategic planning in asset management, ensuring that heirs benefit fully from BPR's advantages.

Qualifications for Business Property Relief

Qualifying for BPR hinges on the nature of the business and its assets. Trading businesses generally qualify, whereas investment-oriented businesses do not. This distinction necessitates a thorough examination of business operations and asset utilization to determine BPR eligibility.

Specifics on Asset Types

  • Does Cash Qualify for BPR? Typically, cash reserves don't qualify unless explicitly required for operational business needs.
  • Do Sole Traders Get BPR? Sole traders can indeed benefit from BPR, provided their business assets align with the qualifying criteria.
  • What is an Excepted Asset? An excepted asset, though part of the business, does not qualify for BPR, usually because its primary use isn't for business purposes.

Business Property Relief on Shares

BPR's application to shares, particularly in unlisted companies, is a significant aspect of inheritance tax planning. These shares can often qualify for 100% relief, offering a potent tool for investors aiming to minimize inheritance tax implications.

Potential Pitfalls and Conditions of BPR

Navigating BPR requires an understanding of its intricacies to avoid common pitfalls. This includes a comprehensive grasp of the conditions under which BPR is granted, ensuring that assets are positioned optimally for relief eligibility.

Rules for Business Property Relief

The rules of BPR, as detailed in the business property relief HMRC manual, are intricate and dynamic. Compliance is critical for anyone aiming to benefit from BPR in their inheritance tax strategy.

Benefits of Using BPR Investments

Inheritance Tax Mitigation

One of the most compelling benefits of BPR is its potential to significantly reduce or even completely eliminate the inheritance tax liability on qualifying business assets. This can result in substantial savings for the heirs.

Business Continuity

BPR can play a pivotal role in ensuring that a family-owned business stays within the family. By reducing or eliminating the inheritance tax burden, heirs are less likely to be forced to sell the business to cover tax liabilities.

Investment Opportunities

For investors, BPR offers an attractive avenue for inheritance tax planning. By investing in BPR-qualifying shares, you can potentially shield these investments from inheritance tax, making them a valuable component of a diversified portfolio.

Age and Ownership Limits

  • Age Limits: BPR does not have specific age restrictions, making it a flexible option for people of all ages.
  • Ownership Limits: The key requirement is that the asset must be owned for at least two years before the owner's death.

Tax Rules in the United Kingdom

  • Inheritance Tax: The primary aim of BPR is to reduce the inheritance tax burden on qualifying assets.
  • Capital Gains Tax: It's important to note that BPR does not offer any relief from Capital Gains Tax.

Additional Considerations

  • Risk: Investing in smaller, unlisted companies for BPR purposes can carry higher risks compared to other types of investments.
  • Liquidity: Some BPR-qualifying investments may not be easily convertible to cash, making them less liquid.
  • Legal Complexity: The rules and regulations surrounding BPR are intricate and subject to change, making it essential to stay updated and seek professional advice.

Continuum Wealth and Business Property Relief IHT Investments

At Continuum Wealth, we understand the complexities and opportunities of business property relief IHT investments, contact us for expert financial advice. Our expertise in BPR schemes and adherence to guidelines as per the business property relief HMRC manual positions us to offer tailored strategies for efficient legacy transfer.

For a more comprehensive understanding of how BPR can integrate into your broader investment strategy, we invite you to explore our Investments and Savings page, where you'll find valuable insights and guidance tailored to your needs. 

Contact UsWhatsapp Chat

Business Property Relief FAQs

Yes, certain lifetime gifts of qualifying assets can benefit from BPR, provided the donor survives for at least seven years from the date of the gift. These gifts are known as potentially exempt transfers.

Yes, there are conditions that assets must meet to qualify for BPR. For instance, they must have been owned for at least two years, and they should be used mainly for trading purposes, excluding non-trading activities like investment.

Assets situated outside the UK can qualify for BPR if they meet the eligibility criteria and are used in a trading or agricultural business that's carried out in the UK.

BPR generally doesn't apply to assets used for rental or investment purposes. However, there may be exceptions, such as furnished holiday letting properties, that could qualify for relief.

Assets held within specific types of trusts, such as Business Property Relief Trusts, can benefit from BPR, but there are specific rules and conditions that must be met.

To ensure your estate benefits from BPR, it's essential to plan carefully and seek professional advice from a qualified solicitor or tax advisor. They can help you structure your assets and affairs in a way that maximises the relief while complying with UK tax laws.

BPR provides relief for agricultural property, including farmland, farm buildings, and certain woodlands, when they are part of a qualifying agricultural business.

In the UK, BPR can provide up to 100% relief from inheritance tax on eligible assets. The level of relief depends on the nature and duration of the ownership of the asset.

Business Property Relief (BPR) is a UK tax relief scheme designed to reduce or eliminate the inheritance tax liability on certain business assets and property when they are included in an individual's estate upon their death.

BPR applies to a range of qualifying assets, including shares or holdings in unlisted trading companies, sole trader businesses, and partnership interests. It may also cover certain assets used in agricultural or trading activities.


Note: This page is for information purposes only and should not be considered as financial advice. Always consult an Independent Financial Adviser for personalised financial advice tailored to your individual circumstances.