FIRTH AND MRS RITA FIRTHAS THE TRUSTEES OF THE L BATLEY1984 SETTLEMENT v Revenue & Customs (INHERITANCE TAX - business property relief - apart-hotel - whether business mainly holding investments)

INHERITANCE TAX - business property relief - apart-hotel - whether business mainly holding investments - qualitative test - level of services provided - held - appeal dismissed

For the Respondents: �� Dr Christopher McNall, Counsel, instructed by the General Counsel and Solicitor to HM Revenue & Customs

             This appeal is brought by Mr and Mrs Firth, the appellants, in their capacity as Trustees of the Batley 1984 Settlement (�the Trust�) (also known to HMRC as the Lawrence Batley 1984 Settlement)..

             The Trustees appeal against Notices of Determination (�the Notices�) issued to the Trustees by the respondents (�HMRC�) on 7 September 2018 refusing inheritance tax (�IHT�) Business Property Relief (�BPR�).� They did so on the grounds that the interest of the Trustees in the business carried on by the Lawrance (Hotel Living) Limited (�The Lawrance�) consists mainly in the holding of investments and therefore is not a qualifying business for the purposes of BPR.� That is the sole issue in this appeal.

             The date of the ten year anniversary of the Trust was 14 November 2014 (the �relevant date�).� On 28 May 2015, both Trustees notified HMRC of a discretionary trust ten year charge and asserted a claim to BPR on the Trust�s holding of 2,605,000 x 5p ordinary shares in The Lawrance stating a value (at 69p per share) of �1,797,450.� The IHT declared in respect of that holding was stated to be zero due to a claim to 100% BPR.