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Can a furnished holiday letting qualify for IHT business property relief? PRIYA DUTTA and IAN MASTON report on a positive tribunal decision
KEY POINTS
- A part-owned holiday let was supplied with services.
- McCall and Lord Fisher cases used to determine whether there was a business.
- The change in HMRC’s view on furnished holiday lettings.
- Decided cases and the difference between active and passive property management.
- The Pawson case seems to set a low bar for business property relief.
The First-tier Tribunal – in the case of Mrs NV Pawson’s Personal Representatives v HMRC [2012] UKFTT 51 – has allowed inheritance tax business property relief in the case of a furnished holiday cottage.
The decision will come as a blow to HMRC – which relatively recently published guidance suggesting a more restrictive application of...
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