IHT Business Property Relief

Most of the litigation involving the availability of the IHT Business Property Relief (BPR) has centred on the critical question of whether the business of a sole trader or a partnership or the business of a company, ‘consists wholly or mainly of making or holding investments’. Depending on which side of the dividing line laid down by s105(3) IHT Act 1984 the business falls, BPR may be available at the rate of 100%, or may not be available at all. In the leading, and so far only Court of Appeal case on this particular question ( IRC v George [2004] STC 147), Carnwath LJ commented that the right to BPR may depend on the fine distinction between businesses which to their owners, and for economic purposes, appear to be identical (see 2004 STC 147 at p149, letter J).