Property investors to benefit from IHT ruling
Property investors could be set to benefit from a new inheritance tax relief case ruling.
According to Stephen Barratt, private client director for James Cowper, those using business property relief will be able to avoid paying the tax on the full value of a holiday let asset transferred on the owner’s death, reports FT Adviser. He explained this is due to a landmark court case, which ruled holiday homeowners who rent out their properties are able to claim business property relief and reduce their inheritance tax bill as a result. “This ruling has surprised many because there is no clear evidence that the owner was substantially involved with the holidaymakers thus casting doubt on [HM Revenue and Customs’] own guidance,” said Mr Barratt. The Society of Trust and Estate Practitioners recently called for the coalition government to implement a reduced rate of inheritance tax where there is a charitable legacy of ten per cent or more left in a Will.
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