Chapter: 2 - Inheritance Tax Mitigation: The Basics

A comparison

2.5.4

BPR is given only broadly to businesses which, or shares in unquoted companies (including AIM companies) which, trade – and which trade at a profit.  By contrast, APR can be obtained by an agricultural landlord, whether at 100% or at 50%: here the qualifying period of ownership is seven years.  Nor is the view to a profit required for APR.  BPR is given on a worldwide basis, whereas APR is limited to property in the EEA.  BPR is applied to market value, while APR is limited to ‘agricultural value’ (see 2.5.3(d)). The big advantage which farmers have over other businessmen is that APR can be given to the farmhouse, though this has been exciting recent adverse scrutiny from both HMRC and the Courts (see 7.2.2).
 
Woodlands can attract BPR, provided that they are managed in a business-like way (annual accounts, VAT registration etc), even if it is hard to show a profit on an annual basis: see 7.4.3.