Faced with an inheritance tax bill of 40%, many families that own residential mobile home parks have been forced to sell following the death of a major shareholder.
However, we have recently established that, contrary to HMRC’s default position, Business Property Relief is available to many mobile home park owners. In other words…
You could claim exemption from IHT.
Working closely with leading tax counsel, we have helped mobile home park owners to prove their entitlement to Business Property Relief and pass their business on to the next generation without saddling them with a substantial tax bill.
If you would like us to conduct a FREE appraisal of your business, please complete the form below.
Inheritance tax (IHT) is charged at 40% of the value of assets passed on and HMRC’s default position is that residential mobile home parks are subject to the tax. In this case IHT would have amounted to over £3million and a number of the parks would have had to be sold to fund this liability, significantly reducing the value for future generations.
We worked with leading tax counsel and established that this business should qualify for BPR.
With the use of Trusts and by changing the presentation of the accounts to better reflect the activities of the business, we have established that BPR applies and the business may be passed on free of IHT.
Whilst not all mobile home parks will qualify for BPR, there was nothing unusual in how this business was run. Many other park owners could take action now to mitigate their IHT liability.
Frequently asked questions
Inheritance Tax (IHT) is a tax charged on the value of your estate when you die. Your estate includes all property, possessions and money. There are variations, but the basic rule is that you pay 40% tax on any value over £325,000, unless you leave it to your spouse, civil partner or a charity.
Business Property Relief (BPR) is a reduction in the value of a business or its assets when working out how much Inheritance Tax has to be paid. You can get BPR of either 50% or 100% on some of an estate’s business assets, which can be passed on while the owner is still alive, or as part of a will.
Not necessarily. It all depends on the individual circumstances of the business. Therefore it’s important to get expert advice.
No, it’s an interpretation of an existing law. HMRC’s default position is that residential mobile home parks do not qualify for BPR; we have proven otherwise.
Yes, we can manage the process for you.
It’s not cheap. But the cost is modest compared to the money you will save in IHT. We offer an initial appraisal and won’t commit you to the full process if we don’t think your business will qualify for BPR.
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About Vista Partners
We are an established firm of accountants based in the South East, providing a wide range of services:
· Tax Planning
· Audit and Accounts preparation
· Business Advisory
· Mergers and Acquisitions
Having been in business for over 100 years we understand what it takes to operate in a constantly changing commercial and regulatory environment. We are a highly qualified, experienced team drawn from a wide range of backgrounds. Our clients comprise established businesses, many of which are family-owned and managed.Find out more