HM Revenue & Customs has advised the Central Association of Agricultural Valuers that it has tightened up its policy on holiday lets that attract business property relief from inheritance tax. It was concerned that in some cases there was little distinction between a business of furnished holiday lettings and, say, a business running a hotel or motel.

Relief will normally be allowed were lettings are short-term (eg, weekly, fortnightly) and where the owner was substantially involved with the holidaymakers activities on and from the premises. Cases may be referred to a technical litigation group where: Lettings were on a longer term the owner had little involvement with the holidaymakers (eg, villa abroad) where lettings were to friends or relatives only or where no services were provided to holidaymakers.