The new ruling could allow holiday home landlords - who let their properties - to claim business property relief and therefore reduce their inheritance tax (IHT) bill.
HM Revenue and Customs (HMRC) had previously tried to pigeonhole holiday lets with other buy-to-let and rental properties, which all are subject to a 40% inheritance tax charge upon the owner’s death.
However, a recent tribunal heard the taxman’s argument that furnished holiday lets should not be considered a business for IHT purposes, and instead ruled that relief should be given if the owner had substantial involvement with the holidaymakers. As a result of the ruling, holiday lets should now be able to claim business property relief, which in turn provides relief from IHT on the transfer of relevant business assets on death. The subject of the ruling was a UK based holiday property but it could have implications for those who also let properties overseas.
Des Simmons, Managing Director of Bournecoast Holiday Agents said: “The ruling was acutely interesting as there was no clear evidence that the owner had in fact been involved with the holidaymakers, which formed the basis of HMRC’s rules for deciding on the relief.
He added, “While HMRC can be expected to take their arguments to appeal, the decision of the Tribunal is good news. We now just wait to see how many of our current landlords can take advantage of this ruling and how many new landlords start to take advantage of the property market as it is and catch on to the tax benefits available when purchasing properties to let as furnished holiday accommodation. We are perfectly positioned at Bournecoast to help potential holiday letting landlords as the local buy-to-let specialists with over 50 years experience in the holiday letting industry.”
Des also emphasised the importance to those with holiday lets to maintain proper records to allow them to claim the relief at a later date, or to use a long established and reputable company who would keep these records for them as a matter of course.
Bournecoast have been providing holiday lets both the visitors and to Buy-to-Let landlords in the Christchurch, Bournemouth and Poole area for over 50 years and are still family run to this day. They pride themselves in providing quality properties and cater for both families and couples’ markets. For more information on available investment properties to rent or buy, or the buy-to-let market in general, please visit http://www.bournecoast.co.uk or telephone 01202 437888.
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In 2010 Bournecoast celebrated it’s 50th anniversary and has been family run since it’s inception when it was established by Major & June Webb in 1960. Keith Simmons MBE, the previous managing director and Major Webb’s son-in-law, was then joined by his son and daughters, Des Simmons, Veronica Strongman and Anita Smith, who now run the company with a team of eighteen staff. Bournecoast has been providing self catering accommodation in the Christchurch, Bournemouth and Poole area for over 50 years and is still family run to this day. It prides itself in providing quality properties and caters for both families and couples’ markets. Properties are inspected by Bournemouth Tourism and hold the Bournemouth Quality Standards awards, assuring visitors that the properties are all of the best possible standard and with their dedicated Customer Care Team on hand to assuage any concerns, you know you’ll be in safe hands. Bournecoast Property Agents have extended their skill base within the ever changing property market and over the years has invested in a skilled workforce, ensuring each member of the team enjoys dealing with people and property whilst ensuring their knowledge of the whole property market is second to none, providing advantage over most local agents.
Marketing Bournecoast email@example.com 01202 437888