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Parking problems

22 January 2008
Issue: 4142 / Categories: Forum & Feedback
Is a car park a business asset?

My client is in his mid-70s but is too energetic to retire properly. He owns an hotel which is run day-to-day by a manager he visits every month to help with decisions and he does a lot of the paperwork.

He pays income tax on the profits of some £30 000 a year even though he makes no drawings and ploughs the profit back into improvements.

It seems clear to me that the hotel is currently covered by 100% business property relief (BPR) and therefore is marginal to any inheritance tax planning he might do.

Just outside the hotel is a pay-and-display car park. The receipts and expenses are included in the hotel's accounts for income tax purposes — turnover of about £20 000 contributing £15 000 to profit. The car park is profitable because of a major national attraction across the road.

Because of...

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