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Follow on Google News | HM Revenue and Customs’ Appeal To Affect Holiday LetsThe Tax Partner of a Cornish firm of chartered accountants and chartered tax advisers is warning that HM Revenue and Customs is appealing a decision which could have a dramatic effect on the families of holiday let owners.
At the end of last year, a case was heard by the First Tier Tax Tribunal to decide whether it was possible for the executors of Mrs Pawson’s (deceased) estate to claim Business Property Relief (BPR) on the Furnished Holiday Accommodation that formed part of her legacy. Business Property Relief generally has the effect of removing the value of a “business property” from a person’s estate when working out the inheritance tax to be paid on their death. Mr Bailey feels that the news of HMRC’s appeal may be good news, if (as he hopes) HMRC lose. “For some time there has been uncertainty as to whether HMRC would appeal against the Pawson decision. Since 2008 HMRC have argued that holiday lets are no different from any other investment property bringing in a rental stream, and so not eligible for BPR, but there were rumours that they had decided not to fight the Pawson case any further.” He continues, “I have just heard (from a very well-placed source) that there is to be an appeal by HMRC after all.” “A decision by the First Tier Tribunal does not set a precedent that has to be followed,” James explains, “but if HMRC lose at the Upper Tribunal (as they should, based on the evidence and the findings of fact by the First Tier Tribunal) then it will not be possible for HMRC to ignore the Court’s ruling.” “My only fear is that HMRC may be planning to rely on the fact that they have deeper pockets to bully the taxpayer into submission, as they did in another inheritance tax case last year. There is a very important principle at stake here, not to mention a great deal of money, so I only hope the case is decided on the basis of the legal facts, not the legal fees.” Robinson Reed Layton will share the findings of the appeal through the local press and on their website as soon as a ruling is made. For further information please visit http://www.rrl- End
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