Borrowing for Business Relief investment

amarshallamarshall Member, Moderator

I know that any borrowing that is taken out to fund a BR qualifying investment is knocked off the qualifying amount at the final reckoning.

I just want to double check that my understanding is correct in that if it was bridging finance that is used whilst the clients main residence (RNRB qualifying) is being sold and that the loan is fully cleared before death, this rule will not apply?

No loan = no deduction.

Seems simple to me but just want to double check.



  • 162B(1) Subsection (2) applies if–

    (a)the whole or part of any value transferred by a transfer of value is to be treated as reduced, under section 104, by virtue of it being attributable to the value of relevant business property, and

    (b)the transferor has a liability which is attributable, in whole or in part, to financing (directly or indirectly)–

    (i)the acquisition of that property, or

    (ii)the maintenance, or an enhancement, of its value.

    That's the law (IHTA84).

    So long as the loan is not deemed to have either directly or indirectly funded some or all of the purchase you're fine.

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