Inheritance Tax – Holiday lets are entitled to business property relief, ruling reversed

Further to our news story in February 2012, HMRC has successfully appealed the tribunal’s decision in which a holiday lettings business was granted business property relief from inheritance tax.

The original tribunal ruled that a holiday let was too active an operation to be an investment and must be regarded as a business asset.

The Upper Tribunal has now reversed this, accepting HMRC’s argument that the business was ‘mainly’ one of holding the property as an investment. The business is therefore not entitled to any relief from inheritance tax.