SVM111240 | IHT Business Property Relief: Excepted Assets - Group Situations

The reference to “use” in SVM111210 applies to use by a company or another company within a group of which it is part. It is unnecessary for the other company to have also been a member of the group for a qualifying period. It is sufficient for it to have been a member immediately before the transfer of value.

An asset will not be an excepted asset in a group situation provided that the company using it was a member of the group at the time of use and immediately before the transfer, and that the use is in a company not excluded under section 111 IHTA 1984.

Section 112(4) IHTA 1984: Land and Buildings

Where land or buildings are not used wholly or mainly for business purposes and constitute ‘excepted assets’, section 112(4) IHTA 1984 gives a measure of relief in respect of the value of any part of the property which is used exclusively for the purposes of the business.

In this context, exclusive use will include such use by another member of the group, provided it satisfies the conditions set out above under “Group Situations”. For example, the other member of the group could use the office.

Careful consideration needs to be made when apportioning the value between that part of the property being wholly or mainly used for the purposes of the business and that which is not.

Additional Guidance: SVM150000