Case brings some relief for those letting holiday cottages, says Saffery Champness

The decision in latest case, Executors of Joyce Graham (deceased) v HMRC, will bring relief to farms and estates that let holiday accommodation with the expectation that Business Property Relief (BPR) against Inheritance Tax will be forthcoming, accountants Saffery Champness has advised.

HMRC has over recent years been successful in challenges to such an approach as in the cases for example of Ross (2017) and Pawson (2013).

The latest Graham case however has changed that with the Tribunal persuaded that the level of services provided in addition to the accommodation were sufficiently extensive that the business evidently was not for investment purposes, saying that “the pool, sauna, bikes and in particular the personal care lavished upon the guests by Louise Graham” were evidence of much more than the letting of a second home.

Jamie Younger, head of the landed estates and rural business group at UK top 20 Chartered Accountant Saffery Champness, said: “This would appear to be a breakthrough on this particular issue where cases have not been resolved in favour of the taxpayer - to the point that many were in fact wondering whether interpretation of the rules had effectively changed for good. That, given this latest case, is clearly not the situation and, that whilst highly subjective in judgment, it is the type, quality and extent of services provided over and above the accommodation itself, that will clinch the argument.”