UK Property Investment Company - Passing on shares to another director on death, can IHT be negated?


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Help appreciated :)

Example Scenario: Two directors own ABC property investments Ltd, there is £1m worth of investment properties owned by the company with £100k cash at the bank. Director one suddenly dies. Can director one's shares be passed on automatically through the article of association to director two so to protect the companies assets from IHT on director one's death?

I've read that it's a wise move to have any property investment company which owns assets or holds capital to have over 51% of its income generated through business activity so to get the full benefit of BPR however I'm wondering if this is necessary when there are multiple directors?

My concern would be that if the "business" part of the company goes through a dry/slow spell for a few years and then one of the directors kick the bucket through unforeseen circumstances leaving the main part of the companies income being generated through rent, IHT comes in to full swing.
 

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