BPR ― the ‘wholly or mainly’ test

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note considers the key test for BPR ― the ‘wholly or mainly’ test, how it is defined and how it is applied. It then considers the considerable body of case law relating to the test and how this has been applied to different types of businesses by the courts. It also considers hybrid businesses and how BPR is applied to them.

Wholly or mainly ― overview

In this note, for ease of reference, ‘trading’ is used to mean a business that does not consist wholly or mainly of making or holding investments and ‘investment’ to mean a business that does consist wholly or mainly of making or holding investments though these are not terms used in the legislation and are generally best avoided in any technical analysis other than as shorthand.

The purpose of the legislation is to give relief to trading businesses. Therefore, BPR is not available on a business which is wholly or mainly dealing in securities, stocks or shares, land or buildings, or making or holding

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Corporation Tax

Associated companies ― from 1 April 2023

Associated companies ― from 1 April 2023Implications of associated companiesFrom 1 April 2023, the rate of corporation tax that a company is subject to depends on the level of its augmented profits. The rate of tax is based on a comparison of the company’s augmented profits against the corporation

22 Mar 2021 10:21 | Produced by Tolley Read more

Trusts and Inheritance Tax

Gifts out of surplus income

Gifts out of surplus incomeA valuable exemption from inheritance tax (IHT) applies to gifts out of surplus income. This exemption applies only to lifetime gifts and is therefore a key part of lifetime planning. The exemption applies to both outright gifts and gifts into trust. Gifts which meet the

14 Jul 2020 11:48 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Owner-Managed Businesses

Residential property and capital allowances

Residential property and capital allowancesResidential property ― plant and machinery allowancesOrdinary residential property does not, and never has, qualified for capital allowances. as CAA 2001, s 35 denies plant allowances for expenditure incurred in providing plant or machinery for use in a

14 Jul 2020 17:14 | Produced by Tolley in association with Martin Wilson and Steven Bone Read more

��Ƶ