There have been a number of companies of late pushing the sale of holiday lets, saying that the value of the property will be excluded from IHT. This relied on the property obtaining business property relief (BPR). To do this, the clients had effectively to be personally involved in the rental of the property and its maintenance, with taking only short-term letting, and personal use.

We have always advised clients against relying on this and have always been doubtful of actually being able to make a successful BPR claim, as you can not make a claim before death.

Following recent legal advice, HMRC has been instructed that its rules are too liberal and for them to be to tightened up.

We believe no one should expect to save IHT using this technique, and that the recent legal advice means that very few people will obtain business property relief.