BPR disqualifying events ― liquidation, winding up and contracts for sale

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note considers the disqualifying events that mean that property is not relevant business property for the purposes of BPR. These disqualifications are covered below in detail. Shares in a company which is in the process of a liquidation or winding up will not qualify and where there is a binding contract for sale the business property will not qualify.

Winding up and liquidation

This disqualification applies only to shares and securities in a company. The shares or securities will not be relevant business property where at the time of the transfer:

•
a winding up order has been made in respect of the company
•
the company has passed a resolution for voluntary winding up, or
•
the company is otherwise in the process of liquidation

IHTA 1984, s 105(5)

This rule does not apply if the business of the company is to continue to be carried on after a reconstruction or amalgamation which

•
is either the purpose of the winding-up or liquidation,

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