We were engaged following the death of one of the owners of the park to deal with an HMRC enquiry into the claim for Business Property Relief (BPR) on the deceased’s estate. HMRC were suggesting that no claim was available against their share of the park's value, placing around half of the holiday park into the estate, which would have resulted in an increase in the IHT liability of around £400,000.
We met with the other members of the family and visited the park to gain a greater understanding of the services that were offered by the park. We also looked at sales of caravans and lodges, which were limited at this park. However, we used local knowledge and benchmarking to equate a value to the rental element of the caravans and lodges and then broke down the remaining element s of the services offered to holidaymakers into their respective parts. This enabled us to break the turnover and profit as well as the management time down between these services demonstrating to HMRC that in fact the park did meet the various tests specified for a successful BPR claim.
HMRC agreed with our analysis and agreed the claim for BPR, saving the family £400,000.
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