Business property relief on furnished holiday letting business

The deceased owned four of five apartments in a manor house. He used three as holiday lets and lived in the other. He ran the lettings business as a sole trader and employed his wife to assist him.

The executors claimed business property relief on the basis the business was a commercial lettings business of furnished holiday accommodation. HMRC refused saying the business consisted mainly of the making or holding of investments (IHTA 1984 s 105(3)). Any additional services or facilities were not enough to change its nature.

The executors appealed. The deceased’s daughter T who was one of them presented the appeal.

The First-tier Tribunal categorised the activities of the business as:

• Investment activities such as the provision of accommodation parking spaces laundry facilities repairs and maintenance of the buildings gardens and grounds and all administration dealing with bookings and advertising.
• Incidental or ancillary...