WE'RE AVAILABLE
Mon - Fri: 9am - 5:30pm
CALL US NOW
0113 887 8432
September 12, 2017
By:

Taxpayer Clears Hurdles for BPR on Livery Business

Our blog from last month provided a summary of the case of M. Ross (Dec’d) v HMRC where the First-Tier Tribunal held that the services provided as part of a furnished holiday let business were not enough to show that the principal activity was not one of investment, thereby denying the taxpayer business property relief (BPR).

However, in The PRs of the Estate of Maureen W. Vigne (Dec’d) v HMRC, the courts held that services provided to horse owners in addition to the provision of land for grazing and stabling purposes were sufficient for BPR to be available, thereby allowing part of the estate to benefit from 100% relief from inheritance tax.

The Facts

  • Prior to her death in 2012, Maureen Vigne was the owner of approximately 30 acres of land from which she operated a livery business.
  • The services provided included the provision of grazing land and stabling, daily health checks of each horse, worming, the provision of hay in winter, and clearing the paddocks of manure.
  • The personal representatives (PRs) claimed BPR of just over £300,000.
  • HMRC issued a determination to the effect that neither relief was available.

The Case

Where it could be demonstrated that valuable services were provided in addition to the use of land, the business would be entitled to claim BPR.

The PRs stressed that a business should not be denied BPR merely because one necessary component of its profit making activity was the use of land. It was argued that the business provided an offering significantly more than the right to occupy a particular parcel of land, and the extra services provided went over and above those included at the lower scale of livery provision.

In response, HMRC contended that the business amounted to no more than simply letting land for the use of others. The additional services provided were minor and overall there were insufficient business activities to indicate that business was anything other than an investment business.

The Decision

The courts agreed with the PRs and held that the business was a genuine livery business which offered significantly more than the mere right to occupy a particular parcel of land. The level of services provided to horse owners meant that the business was not wholly or mainly one of holding investments.

Contact us today to discuss your tax requirements.
CONTACT US
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram