Lessons from Pawson: ‘the high water mark for holiday lets’

It appears that the long running saga of the Pawson business property relief case has drawn to an end with Lord Justice Briggs refusing leave to appeal from the Upper Tribunal to the Court of Appeal at the beginning of October.

The Pawson case dealt with whether the letting of holiday cottages should qualify for business property relief for inheritance tax (as the First-tier Tribunal had decided in 2011) or whether it consisted mainly of making or holding investments (as the Upper Tribunal subsequently decided earlier this year). The case had generated considerable interest as it would provide guidance for the 65 000-odd UK holiday homeowners on their liability to inheritance tax.

Mrs Pawson owned (with her three children) 25% of a bungalow on the Suffolk...