Chapter 17 - Reliefs and Other Aspects

Question 1

What is the Double Tax Relief for IHT purposes?

Answer 1

Lower of:
1) UK tax on overseas income:
(IHT liability / Gross Chargeable Estate) x100 (%), x cost of overseas asset.
2) Overseas tax on overseas income (given in question).

Question 2

What is Business Property Relief (BPR)?

Answer 2

Used to entirely or partially exempt an asset from IHT.
Applies to lifetime transfers and assets in the death estate.
Qualifying assets - unincorporated trading bus., shares in quoted trading co. (100% or 50% if has control, i.e. >50%).
Doesn’t apply to value of excepted assets - not large cash balances/assets held for investments.
Share value x ((Net Assets-Excepted Assets)/Net Assets).