Tax case in Scotland has Inheritance Tax implications.

JCP Solicitors report that a tax case recently decided in Scotland has implications for Inheritance Tax (IHT) for businesses where a trade that qualifies for Business Property Relief (BPR) is carried alongside one which does not.

BPR opertes to reduce the value of a business asset to 50% of its market value or nil for IHT purposes and is therefore a very valuable relief when passing on a family business.

In the case in point, a landed estate operated a farming business, which qualifies for BPR, along side a letting business, which does not qualify for BPR.

Despite the opposition of HM Revenue and Customs, the Special Commissioners concluded that the estate was managed as one business, so the presence of letting income did not prevent BPR being available.

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