Inheriting AIM Shares
B2405
Member
Hi All,
My brain is a bit foggy this morning so I'm hoping someone can help! I have a client who has inherited a portfolio of AIM shares from her late father. The shares were held for longer than 2 years so qualified for BADR.
My question is, now that the client owns the shares in her own right, does the 2 year holding period start again? or would the shares be exempt by default because of the length of time they were held by her father? She's likely to live much longer than 2 years, but I want to make sure I've covered all bases.
Thanks in advance!
Comments
Pretty sure that the two year clock starts again unless you pass the BPR qualifying asset to a spouse or civil partner.
From PruAdviser Tech Centre
The general rule is that property does not qualify for business property relief unless it was owned by the transferor throughout the two years immediately preceding the transfer (S106). The nature of the business carried on needn’t be the same throughout the two-year period, but there must have been a business throughout that period.
The general rule is relaxed in three situations:
Where the transferor became entitled to the property on the death of another person
Where the transferred property replaced other business property
Where the transferred property had been acquired on an earlier transfer within the two year period
Where the deceased / transferor became entitled to property on the death of another person, he / she is treated as having owned it from the date of the other person's death (S108(a)). Where the deceased / transferor became entitled to property on the death of their spouse or civil partner, he / she ‘inherits’ the ownership period of the spouse or civil partner irrespective of how long they had been married (S108(b)).
Refs are to IHTA1984