Recent Business Property Relief Decisions

Two First-tier Tribunal (FTT) decisions this summer have helped clarify if furnished holiday lets and livery stable businesses qualify for business property relief (BPR).

In Personal Representatives of the Estate of M W Vigne Deceased v HMRC [2017] UKFTT 632 (TC) HMRC had argued that the deceased’s livery stable business did not qualify for BPR as it was simply the land owner letting or licensing their land for the use of the horse owners and therefore ought to be deemed to be an investment business. However, the Personal Representatives successfully argued that the livery business was not simply a matter of letting horse owners use the land, but also involved providing services for the livery owners such as supplying them with hay and wormer, and removing manure from the fields. The FTT accepted the Personal Representatives’ arguments and concluded that no properly informed observer could have said that the deceased was in the business of “holding investments”. As such the livery stable business did qualify for BPR.

By contrast, the case of Executors of the Estate of Marjorie Ross Deceased v HMRC [2017] UKFTT 0507 (TC) has cast doubt on the availability of BPR for owners of furnished holiday lets (FHLs). This case focused on whether a FHL can qualify for 100% inheritance tax relief, and the key question was whether the level of ancillary services provided as part of the letting made the FHL a trade rather than an investment asset in order to qualify for BPR. Despite the high level of ancillary services provided, HMRC argued that BPR was not available because the level and standard of services provided were insufficient and irrelevant, and the FTT agreed. It was therefore held that the business was mainly to do with the letting of land and BPR was not available. 

For more information please contact Claire Lewis. 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.