BPR on lifetime transfers where death is within seven years (BPR ‘clawback’)

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note considers the BPR position on death of chargeable lifetime transfers (CLTs) and potentially exempt transfers (PETs) made within seven years of death. The BPR position will be re-tested on a death of the transferor within seven years of the gift. The property must, broadly, qualify for BPR at that time. Where the property no longer qualifies for BPR the relief will be subject to a clawback and the property may be subject to a charge to IHT. However the effects of the clawback are different for the two different types of transfer. Where the original business property has been disposed of there are provisions for replacement property to qualify for the relief.

BPR on the initial gift

Where the original gift is a chargeable lifetime transfer, any BPR due will have been taken into account and reported to HMRC on one of the IHT100 (see the IHT100 completion― overview (before August 2024) guidance note) suite of forms unless the transfer was an excepted

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