Business Property Relief Trust
A carve-out that settles named business holdings on a discretionary trust, before residue, so that any Business Property Relief on those assets is fully used on death.
For the general law, see Understanding trusts.
What it is
An addition that settles named business holdings on a discretionary trust as a carve-out: the qualifying assets are set aside off the top, before the residue, so that any Business Property Relief on those assets is fully used on death and they never form part of the residuary estate. The point is to ringfence relief-qualifying business assets into a trust (rather than letting relief go to waste by leaving them to a spouse outright), with the trustees taking professional advice on the tax position at the date of death.
On a single will it takes effect on death. On mirror wills you set, per testator, whether it fires whenever that testator dies or only if that testator survives the other (the second death).
The clause reflects the restriction from 6 April 2026: 100% relief is expected to apply only to the first £2.5 million of combined business and agricultural property, with the excess at 50%.
Who it suits
- Business owners whose estate includes shares or business interests that qualify for Business Property Relief.
- Any plan aiming to preserve relief and keep business assets working within the family.
Which will it goes in
- Single wills - any number, each taking its assets before the residue.
- Mirror wills - any number. Which testator each one applies to - one half or both - and whether it fires whenever that testator dies or only if they survive the other are both chosen at the quoting stage in the quote builder (the Configure trusts & additions drawer, using the testator columns and shared Both spouses block), not in the drafting form. The same trust can appear for each spouse.
Add it as an order line ("BPR Addition"). It sets its assets aside before the residue and coexists with any residue arrangement.
What you'll set on the form
Trustees and beneficiaries
The standard trustee and beneficiary settings apply - see the shared settings. The beneficiaries are the discretionary class of the business fund.
The business assets and relief
| Setting | Choices | Default | What it does |
|---|---|---|---|
| Businesses | one or more businesses | - | Required - at least one. The business holdings settled into the trust. |
| Anticipated relief rate | 100% · 50% · Mixed | Mixed | The Business Property Relief rate you expect to apply. Mixed states both categories in the clause (100% for sole traders, partnership shares and unquoted holdings; 50% for quoted controlling holdings and personally-owned assets used in the business). |
Good to know
- Like the First-Death Capped Trust, it is a carve-out set aside before the residue, so it sits alongside any residue arrangement rather than competing with it.
- On mirror wills you can put a single shared trust on both halves and set each to only if this testator survives the other, so the business assets are ring-fenced just once - on the second death.
- Don't give the same business away as an outright gift and also settle it here - the form won't allow the same asset in two places.
- Where the same assets also qualify for Agricultural Property Relief, that relief takes priority on the overlapping value (the clause says so).
- The trust is limited to UK business property; overseas assets are flagged for advice.
The law behind it
- Understanding Trusts - A Plain-English GuideGeneral guidanceWhat a trust is, how it works, and a plain-language tour of every main type of trust used in England & Wales.
Related
- Agricultural Property Relief TrustProductA carve-out that settles agricultural property on a discretionary trust, before residue, so that any Agricultural Property Relief on it is fully used on death.