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A husband and wife trade as a restaurant that operates from the ground floor of a property they own. The upper floor of the building is a flat, which is occupied by the wife
A husband and wife own a restaurant situated on the ground floor of a property. On the first floor is a flat which is occupied by the wife (the husband lives in the jointly owned guest house a short distance away).
My question concerns the inheritance tax business property relief (BPR) due on the restaurant. On the understanding that more than 50% of the building is occupied by the restaurant would the whole of the premises (ie including the flat) qualify for BPR under IHTA 1984 s 112 because the building is used “wholly or mainly for the purposes of the business?”
The HMRC Inheritance Tax Manual at IHTM25354 gives guidance to how the building would be split into two if the building were to be treated as an excepted asset because it was not used “wholly or mainly”. Surely in this case it does...
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