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Exceptional case?
KEY POINTS
- Furnished holidays lettings rarely succeed in claiming business property relief.
- Similarities between Graham and the Upper Tribunal’s decision in Pawson.
- Property business is usually considered an investment rather than a trade.
- Additional services provided to guests must be high to make the activity a trade.
There can be few greyer areas than the application of business property relief (BPR) under IHTA 1984 s 104 to a business involving the letting of land or property. For owners of furnished holiday lettings businesses in particular the position seems anomalous given that the carrying on of the business is treated as a trade for various purposes under specific income tax and capital gains tax provisions – for example loss relief (ITA 2007 s 127) and capital gains tax (TCGA 1992 s 241(3)). Inheritance tax...
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