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HMRC internal manual

Inheritance Tax Manual

Business relief: Investment businesses: Property letting

You should investigate whether the rule excluding investment businesses (IHTM25261) from business relief applies if the business involves a caravan site, letting of furnished accommodation, a furnished holiday letting, letting commercial premises or other letting activities. There may be a wide range of activities within any of these headings.

The two tests that need to be applied in these cases are:

  1. whether the activities carried on constitute a business for the purposes of IHTA84/S105 (1)(a);
  2. if they do, is relief precluded because that business was one of ‘wholly or mainly holding investments’, IHTA84/S105 (3).