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HMRC internal manual

Shares and Assets Valuation Manual

IHT Business Property Relief: Minimum period of ownership - general rule


The general rule is contained in s.106. It is that property is not relevant business property - in other words does not qualify for relief - unless it was owned by the transferor throughout the two years immediately preceding the transfer.

The nature of the business carried on by or on the s.105(1) business property need not be the same throughout the two-year period. But there must have been a business throughout that period for example, if a company carried on a farming business until one year before a transfer and then changed its activity to providing recreational facilities for families, the shares in it would be relevant business property if the transferor had owned them for the two years before the transfer.

Own and Ownership: general meaning

For the purposes of the general rule in s.106 and the supplementary provisions in sections 107 to 109A, we consider ownership to mean:

  • in the case of settled property in which there is no interest in possession or other settlements which are subject to ten-yearly and exit charges, legal ownership by the trustees
  • in all other cases, beneficial entitlement [including entitlement to settled property in which the transferor had a (qualifying) beneficial interest in possession].
  Additional Guidance: SVM150000