Nature of activity for business property relief

The trust was subject to a ten-year charge in relation to shares held in a company. The trustees claimed that the value of the shares was reduced to zero because of the availability of business property relief. HMRC issued a determination denying relief and the trustees appealed.

The company operated an ‘aparthotel’ business. This was a hybrid of a hotel and furnished apartments. The company operated from premises in York and Harrogate. The question for the First-tier Tribunal was whether the business was wholly or mainly one of making or holding investments.

After reviewing the extensive case law in this area the tribunal took evidence as to the precise way that the business operated. It was hampered by a lack of financial information or of detailed descriptions of how the staff spend their time. It also found that the general manager had ‘over egged the pudding’ when it came to...