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IHT business property relief, confused please help.
flamespittingcobra
Posts: 7 Forumite
in Cutting tax
I hope somebody can help me. I am 66 and in good health (touch wood) but a school friend of mine had a big stroke recently and it's made me think more seriously about these things, I'm unsure about the BPR, if we might be able to argue a case for it and if there are any changes we should make to be eligable for it or other changes we can make to reduce any iht due.
I am a residential landlord operating as a sole trader since 1975, initially as a builder then gradually moving into residential lettings. I employ my son full-time to run the business and I still work in it. I have a large victorian house which we have converted into 10 self-contained flats, a block of 4 flats which we built from scratch, the freehold on a block of 6 flats of which i own 2 of the leases. These are all at the same site. In addition we have a flat on a new development and a 4 bedroom house left to me by my father 20 years ago.
The flats in the victorian house are let furnished, all the rest unfurnished and everything is let on an assured shorthold tenancy becoming periodic tenancys at the end of the term. We perform all lettings ourselves, agents are not involved at any stage, in addition we also perform all maintenance, improvements and gardening at all the above properties ourselves. I also own my own home and am mortgage free on all the above properties so my estate would certainly fall above the IHT threashold, the victorian block and the 4 bed house are in my name the block of 4, plus the 2 leases, the new development flat and our home are in joint names with my wife.
I am only a simple fellow and so was hoping somebody more informed might be able to explain the implications of IHT and if my son may be able to claim BPR if anything were to happen to me and if there would be any capital gains tax implications. Would it make any difference to liabilities if we became a limited company? does a furnished letting make any difference? etc
Many thanks in advance for any help you may be able to give me
I am a residential landlord operating as a sole trader since 1975, initially as a builder then gradually moving into residential lettings. I employ my son full-time to run the business and I still work in it. I have a large victorian house which we have converted into 10 self-contained flats, a block of 4 flats which we built from scratch, the freehold on a block of 6 flats of which i own 2 of the leases. These are all at the same site. In addition we have a flat on a new development and a 4 bedroom house left to me by my father 20 years ago.
The flats in the victorian house are let furnished, all the rest unfurnished and everything is let on an assured shorthold tenancy becoming periodic tenancys at the end of the term. We perform all lettings ourselves, agents are not involved at any stage, in addition we also perform all maintenance, improvements and gardening at all the above properties ourselves. I also own my own home and am mortgage free on all the above properties so my estate would certainly fall above the IHT threashold, the victorian block and the 4 bed house are in my name the block of 4, plus the 2 leases, the new development flat and our home are in joint names with my wife.
I am only a simple fellow and so was hoping somebody more informed might be able to explain the implications of IHT and if my son may be able to claim BPR if anything were to happen to me and if there would be any capital gains tax implications. Would it make any difference to liabilities if we became a limited company? does a furnished letting make any difference? etc
Many thanks in advance for any help you may be able to give me
0
Comments
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as it stands you may qualify for BPR at 50% but not 100%. If you changed to ltd then i think it would allow for 100/5 BPR but i am not sure on the CGT: as effectively you would be passing the properties to the ltd company and any gains would be realised0
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