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BPR and changes to the business structure


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024

BPR and changes to the business structure


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024
imgtext

This guidance note considers how changes to the business structure affect the BPR position of the assets concerned. It considers changes arising from incorporation, the formation of a partnerhsip, reconstruction, liquidation, winding up and otherwise ceasing to trade.

Incorporation

Sole traders, partnerships or LLPs may choose to incorporate their business and to trade instead as a limited company. This may be for tax, liability or other reasons. See the Incorporation ― introduction and procedure guidance note for further details about the tax effects of incorporation.

There are different ways to incorporate and different tax effects follow from each. This note focusses on the BPR consequences of incorporation. The potential loss of the relief should be considered when choosing a method of incorporation.

Incorporation for shares

An incorporation for shares means that all of the assets and liabilities of the business are exchanged for shares in the new company. Any gains on those assets are rolled into the base cost of the shares. See the Capital gains tax implications of incorporation

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  • 26 Feb 2025 05:40

Home/ Tolley Tax Guidance/ Trusts and Inheritance Tax / Advising on BPR and APR

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