Holiday lets are entitled to IIHT Business Property Relief if they provide ‘exceptional service’

A furnished holiday letting business qualified for business property relief (BPR) from inheritance tax because it provided guests with an ‘exceptional level of service and amenities’, and so did not consist wholly or mainly of making or holding investments. So the First Tier Tax Tribunal (FTT) has held in Personal Representatives of Grace Joyce Graham deceased v HMRC (2018 UKFTT 306 TC), in a ruling of significant interest to farms and estates that let holiday accommodation. However, other recent cases have gone the other way and the criteria for allowing BPR remain strict.

HMRC has, over recent years, been successful in challenges to such an approach, as in the cases of Ross (2017), Pawson (2013) and Zetland (2013).
Well worth a look at the case report –