Peter Vaines measures up on BPR, income splitting & doormats
The case of HMRC v Executors of the Earl of Balfour [2010] UK UT 300 has recently been heard by the Upper Tribunal. This is a most interesting and valuable case as it analyses the meaning of business property for the purposes of inheritance tax. This was a Scottish case involving Scots law but there are important elements relating to inheritance tax which, of course, applies to the whole of the UK.
Lord Balfour had an interest in a farming partnership and was the proprietor of a landed estate comprising of approximately 2,000 acres which consisted of two in-hand farms, three let farms, two sets of business premises and 26 let houses. There were also some parks which were let on a seasonal basis.
Lord Balfour made no distinction between the partnership and the estate. His own view seemed to be that everything was run as a single business. The First Tier Tribunal agreed that the whole of the activities represented a single business and that the entirety qualified for business property relief. HMRC
