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Implications of the Upper Tribunal decision in Pawson for owners of vacation lets
KEY POINTS
- Business property relief claim for an inherited holiday let property.
- Level of service provided.
- Comparison with hotels and bed and breakfasts.
- Incompatible statements in HMRC’s Inheritance Tax Manual.
The Upper Tribunal delivered its judgment in CRC v Lockyer and Robertson (as personal representatives of N V Pawson deceased) disallowing a claim to business property relief (BPR) in respect of a holiday letting cottage. This reversed the decision of the First-tier Tribunal which was covered in Beside the seaside.
In brief the facts were that Mrs Pawson who died in June 2006 owned a 25% share in a holiday letting property called “Fairhaven” in Suffolk. This was let on a typical holiday letting pattern of long weekends or one or two weeks at a time.
The...
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