In a situation where a company has excepted assets, how can BPR be calculated?

In the context of Business Property Relief (BPR), the correct calculation method focuses on the valuation of business assets for the purpose of establishing eligibility for relief. BPR is available for certain types of business assets that are held as part of a trading business, and it reduces the value of those assets for inheritance tax purposes.

When a company possesses excepted assets—such as investments or assets not used in the operational activities of the business—these do not qualify for BPR. Therefore, BPR must be calculated specifically based on the value of qualifying business assets only. This means that the calculation should target the actual business assets that are used in the trade and not include excepted assets, ensuring that the determination of relief is accurate and reflects the genuine business value.

The focus on business assets allows for a clear identification of those eligible for relief, thus facilitating tax planning and liability management for entities engaged in trade. It's essential to distinguish between which assets fall under this definition to maximize potential tax relief.

This understanding is critical in ensuring that the relief is appropriately applied only to those assets that genuinely contribute to the business's trading activities.