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Business property relief due

06 February 2012
Issue: 4340 / Categories: Tax cases , Inheritance Tax
N V Pawson (deceased) (TC1748)

Daughters queried the decision of HMRC that a 25% property share belonging to their late mother – for whom they were personal representatives – was subject to inheritance tax. They claimed business property relief was due.

The property near Aldeburgh was let fully furnished as a holiday home and jointly owned by the deceased taxpayer and members of her family.

The First-tier Tribunal accepted the property had been run as a business for more than the two years before the taxpayer’s death. The fact the family had use of the property for three weeks a year did not prevent it from being run as a holiday let.

The business had been profitable for two of the three years before the mother died and was running profitably in the year of her death. The tribunal concluded the business was being run with a view to gain that satisfied

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