Business asset relief

[Vicki B]

Can business asset relief be obtained for inheritance tax purposes on 2 self contained flats that were let as holiday flats for over 30 years?
The owner lived in one flat in the same building as the 2 holiday flats.
If the relief cannot be obtained please can a reason be given.
The IHT helpline has been rung several times and given a different answer each time.

[Nigel Lord]

Vicki B

Generally, Business Property Relief (BPR) will be denied by the Inspector for property businesses where the main activity is making or holding investments. There are several Special Commissioners' determinations supporting the Revenue's contention.

However, where the lettings are short term (one or more weeks) and the owner personally or via an agent is substantially involved in the holidaymaker's activities, BPR may be allowable. I refer you to:

Inland Revenue Inspector's Advanced Instruction Manual
Chapter L - Business / agricultural / woodlands relief
General introduction to reliefs for business property and agricultural property
Place in scheme of IHTA - Holiday Lettings

Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Loughton
Essex, IG10 4PE
020 8418 9101 & 07769 931852
mail@lordassociates.co.uk