Glossary · UK
What is Business Property Relief (BPR)?
Business Property Relief reduces the value of qualifying business assets for Inheritance Tax, cutting the taxable amount by 100% or 50%.
Full Definition
Business Property Relief (BPR) reduces the value of qualifying business assets when calculating Inheritance Tax (IHT), whether on death or on lifetime transfers. Relief is given at 100% for an unincorporated business or interest in one, and for unquoted shares (including most AIM-listed holdings). It is given at 50% for controlling quoted shareholdings and for certain land, buildings or machinery used by a business the deceased controlled or in their partnership. To qualify, the asset must generally have been owned for at least two years, and the business must be mainly trading rather than holding investments such as let property. BPR works alongside the standard IHT framework: the nil-rate band of £325,000, the residence nil-rate band of £175,000 (tapered above a £2m estate), and the 40% rate (36% where 10% or more is left to charity). Note that from 6 April 2026 the Government has legislated to cap 100% relief at a combined £1 million allowance for business and agricultural property, with value above that taxed at an effective 20% (50% relief); AIM and other non-controlling quoted shares attract 50% relief only. IHT is UK-wide, so the same rules apply in Scotland, Wales and Northern Ireland.