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Holiday Home Owners Beat the Taxman

March 2012

Des SimmonsDORSET Property Agents Bournecoast are celebrating a recent landmark court case where holiday landlords were victorious over the taxman in a dispute over whether their properties are deemed investments and therefore liable to business taxes.

The new ruling could allow holiday home landlords - who let their properties - to claim business property relief and therefore reduce their inheritance tax (IHT) bill.

HM Revenue and Customs (HMRC) had previously tried to pigeonhole holiday lets with other buy-to-let and rental properties, which all are subject to a 40% inheritance tax charge upon the owner's death.

However, a recent tribunal heard the taxman's argument that furnished holiday lets should not be considered a business for IHT purposes, and instead ruled that relief should be given if the owner had substantial involvement with the holidaymakers.

As a result of the ruling, holiday lets should now be able to claim business property relief, which in turn provides relief from IHT on the transfer of relevant business assets on death.

The subject of the ruling was a UK based holiday property but it could have implications for those who also let properties overseas. Des Simmons, Managing Director of Bournecoast Holiday Agents said: "The ruling was acutely interesting as there was no clear evidence that the owner had in fact been involved with the holidaymakers, which formed the basis of HMRC's rules for deciding on the relief.

He added, "While HMRC can be expected to take their arguments to appeal, the decision of the Tribunal is good news. We now just wait to see how many of our current landlords can take advantage of this ruling and how many new landlords start to take advantage of the property market as it is and catch on to the tax benefits available when purchasing properties to let as furnished holiday accommodation. We are perfectly positioned at Bournecoast to help potential holiday letting landlords as the local buy-to-let specialists with over 50 years experience in the holiday letting industry."

Des also emphasised the importance to those with holiday lets to maintain proper records to allow them to claim the relief at a later date, or to use a long established and reputable company who would keep these records for them as a matter of course.

Bournecoast have been providing holiday lets both the visitors and to Buy-to-Let landlords in the Christchurch, Bournemouth and Poole area for over 50 years and are still family run to this day. They pride themselves in providing quality properties and cater for both families and couples' markets.

For more information on available investment properties to rent or buy, or the buy-to-let market in general, please visit www.bournecoast.co.uk or telephone 01202 437888.

In 2010 Bournecoast celebrated it's 50th anniversary and has been family run since it's inception when it was established by Major & June Webb in 1960. Keith Simmons MBE, the previous managing director and Major Webb's son-in-law, was then joined by his son and daughters, Des Simmons, Veronica Strongman and Anita Smith, who now run the company with a team of fifteen staff.

Bournecoast Property Agents have extended their skill base within the ever changing property market.

Over the past 50 years Bourneocast has invested in a skilled workforce, ensuring each member of the team enjoys dealing with people and property whilst ensuring their knowledge of the whole property market is second to none, providing advantage over most local agents.

Issued by:
Alex Eaton
Marketing
Bournecoast
alexeaton@bournecoast.co.uk
01202 437888

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Bournecoast Ltd
26 Southbourne Grove
Bournemouth
Dorset
BH6 3RA
Tel: (01202) 437 888
Fax: (01202) 437 889