February 13, 2013 at 11:04 AM
The upper tribunal has overturned the lower tribunal case of Pawson.The case concerned whether business property relief was available on the deceased holiday cottage where minimal services has been provided.
The lower tribunal had allowed the relief on the grounds that an intelligent businees person would regard it as a business.
The upper tribunal decided that the services such as cleaning and a wecome pack and being on call to deal with problems were of a relatively standatrd nature and there was nothing to distinguish it from any other actively managed furnished letting business of a holiday property.The property was therefore characterised as an investment rather than a business.
Notew this does not affect the income tax / capital gains tax treatment and only affects inheritance tax.