SVM111140 | IHT Business Property Relief: Investment businesses

Section 105(3) IHTA 1984 refuses relief for a business or interest in a business, or shares or securities of a company, if the business (or the company’s business) consists wholly or mainly of one or more of the following:

• dealing in securities, stocks or shares

• dealing in land or buildings,

• or making or holding investments.

Under Section 105(4) IHTA 1984, however, this refusal of relief does not apply:

a. to any property if the business concerned is wholly that of a market maker or is that of a discount house and (in either case) is carried on in the UK, (extended to include market makers or discount houses who conduct business in any European Economic area (EEA) state from 31 December 2012) or

b. to shares or securities of a company if its business consists wholly or mainly in being a holding company of one or more companies whose business does not fall within section 105(3) IHTA 1984.

‘Market maker’ is defined by section 105(7) IHTA 1984 as a person who:

a. holds himself out at all normal times in compliance with the rules of The Stock Exchange as willing to buy and sell securities, stocks or shares at a price specified by him, and

b. is recognised as doing so by the Council of The Stock Exchange’.

Additional Guidance: SVM150000