I own an apartment in a five-star resort that is rented out for nine months a year. The resort provides services including 24-hour security, room service, childcare, gym, tennis courts, golf course, restaurants, pools, and daily cleaning. All management is carried out by the resort. Rental income is pooled and shared between owners whose apartments were available on that day. Would I be able to claim BPR? 

Arthur replies: 

If you look at HMRC’s Inheritance Tax Manual at IHTM25277 and IHTM25278, you can see that there is a fine line between a hotelier and the owner of a property who lets furnished rooms and provides services regarding inheritance tax business property relief (BPR). Case law supports HMRC's position that the latter is not eligible for business relief because it is classified as 'holding the property as an investment'. HMRC does, however, concede that in some cases, the level of additional services provided may be so high that the activity can be considered as non-investment, and each case will be treated on its own facts. In short, I can't give you a definitive answer because this is a grey area.