In Anne Christine Curtis Green v HMRC [2015] TC04519 the letting of five self-contained holiday units did not qualify for IHT Business Property relief: the business was mainly one of investment.
- Business Property Relief (BPR) provides relief from Inheritance Tax (IHT) on the transfer of relevant business assets at a rate of 50% or 100%.
- There is no BPR if the business or company is one of "wholly or mainly" in dealing in securities, stocks or shares, land or buildings or in the making or holding of investments.
Mrs Green owned a property divided into five units of self-contained furnished holiday let accommodation: two within the main house and three within the curtilage thereof.
- Mrs Green did not live onsite but handled all bookings.
- Services provided to guests included a welcome pack, linen provision, wifi. laundry facilities, and caretaker services.
- Mrs Green transferred 85% of the business to a settlement (a transfer of value for IHT purposes) and claimed business property relief, on the basis that the income received was not rent, so there was no investment income, and the services and facilities provided were similar to those of a hotel.
The FTT agreed with HMRC that in this case the claim to BPR should be denied. The guests were mainly left to their own devices and the services provided were insufficient to demonstrate that the business was anything other than mainly investment.
The appeal was therefore dismissed.
This case also raised an interesting point of procedure. HMRC applied to have the case struck out for lack of witness statements, representatives of the claimant, (claiming a misunderstanding of the tribunal process) requested that the claimant be allowed to give oral evidence. The court refused but decided to continue with the hearing without delay.
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