How park owners can improve their Business Property Relief qualifying status

Business Property Relief (BPR) ensures, on death, that ownership of a business can pass through the estate of the deceased person, to the beneficiaries, without any inheritance tax (IHT) applying.  Securing status is an implicit acceptance that the business is trading too, thereby allowing owners to claim capital gains and other tax reliefs.

Recent case law has reduced park owner confidence in their eligibility to claim BPR, so what can be done to enhance your chances of qualifying?

• Record keeping 
  Good quality accounting records are essential in providing management the level of detail required in order to asses its results in the context of the 5 key factors ( Income, profits, employee time, capital employed and what the business does). Park owners should consider the way their annual accounts are presented, ensuring that the separation between trading and other business activities is clear.
• Annual reviews
  Making use of clearly presented accounts, the 5 Key factors should be considered annually and documented. If the BPR status is challenged this would help demonstrate the business consistently comprised of wholly or mainly trading activities in the years running up to the transfer.
• Additional park services
  Adding additional facilities to your park will strengthen the argument that the business is a trading entity.  Any income generated from a bar, restaurant or other leisure facility will be considered as trading income and contribute to a higher percentage of trading activities for BPR qualification.
• Consider other tax planning options and your tax position as a whole
  Should you think your business fails to qualify for BPR, there are other options that can be considered, such as lifetime gifts or life insurance.

There is no guarantee for securing BPR status for your park but it is critical to seek professional advice in doing what you can to raise your chances in securing this important relief.  Our team of leisure specialists will be happy to assist you in making the necessary changes in order to enhance your future position. For further information please follow links to our additional informative factsheets:
Example Profit & Loss Account 

If you’re seeking some expert leisure sector support, please contact our EQ Leisure team at leisure@eqaccountants.co.uk or contact one of our offices.