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Holiday investment

12 March 2013 / Helen Lewis
Issue: 4394 / Categories: Comment & Analysis , Inheritance Tax

Implications of the Upper Tribunal decision in Pawson for owners of vacation lets


  • 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.


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