Chester 01244 405555

Grosvenor Court
Foregate Street Chester
Cheshire CH1 1HG
DX: 19990 Chester

Shrewsbury 01743 443 043

Lakeside House
Oxon Business Park
Shrewsbury SY3 5HJ
DX: 148563 Shrewsbury 14

Manchester 0844 800 8346

Pall Mall Court
61-67 King Street
Manchester M2 4PD

Send us a message
Our Offices

Application to Appeal IHT Relief Claim on Holiday Lettings Rejected

15th January, 2014

The door appears to have finally slammed shut on a family’s attempt to obtain Business Property Relief (BPR) from Inheritance Tax (IHT) in respect of a property which had been operated as a furnished holiday letting by their late mother. It has recently been announced that a verbal application to appeal against a Tribunal decision denying BPR has been rejected.

BPR is available on ‘business assets’, but not investment assets, and operates to reduce the value of business assets for IHT purposes. It is therefore a most valuable relief for the beneficiaries of those who are business owners when they die.

In practice, the ruling means that BPR will be available for furnished holiday lettings only where a substantial range of services is also supplied to those renting the property: such services must be sufficient to justify the income being regarded as business income as opposed to mere ‘rent’.

It is expected that this decision will lead to HM Revenue and Customs taking a stronger line in rejecting claims for BPR in similar circumstances and its implications should be considered carefully by those contemplating making such a claim in the future.

It is unclear just how much service should be provided to qualify but it must be significant. In the Pawson case it was argued by the taxpayer that the services provided were not standard and were of a fairly extensive nature however this did not sway the Tribunal’s view.

For further information please contact us here.

 

You might also be interested in...

Solicitors’ Professional Indemnity Insurance: Run-off and alternative regulators

18th July, 2018

Special Focus: Solicitors’ Professional Indemnity Insurance Run-off – it dominates the thoughts of sole practitioners and partners in smaller law firms in my experience and restricts the ambitions of firms. The SRA could help law firms by relaxing their rules on run-off cover on their Solicitors’ Professional Indemnity Insurance to help firms merge or close more easily. This would protect... Read More »

Senior employment lawyer joins Theatr Clwyd board

17th July, 2018

Helen Watson, Head of Employment Law at Aaron & Partners LLP, has taken up an invitation to become a Trustee of both the Trust Board and the Main Board Theatr Clwyd has bolstered its senior leadership team with the appointment of an experienced employment law solicitor to support its vision of being at the forefront of theatre making... Read More »

Why there is more to CSR than just boosting a company’s ego

6th July, 2018

When a business invests in its community it deserves praise – but it must go beyond that, writes Helen Watson, a trustee at Claire House and partner at Aaron and Partners Solicitors. Corporate social responsibility (CSR) is the link between a company and the community in which it operates. As a trustee on charity boards including Claire House... Read More »

Contact Us