Business as usual

(From Taxation 3 May 1990)

Can the letting of a property constitute a business for inheritance tax purposes such that business property relief is due on the value of that property?

The Capital Taxes Office has maintained steadfastly that it cannot but it will now need to soften this approach following a Special Commissioner's decision given on 13 November 1989.

The facts of the case are summarised below together with extracts from the decision.

The background

Mr and Mrs S died within one month of each other in 1987. Mr and Mrs S owned jointly a substantial four storey building in the medical area of London.

The top two floors of the building were used as their private residence and the remaining two floors were let out on medical licences to medical and dental practitioners.

There was also a basement which comprised an x-ray room for use by the...