IHT business property relief

Readers may recall the decision of the First Tier Tribunal in the case of Brander v HMRC. This concerned a claim for business property relief of relating to a Scottish landed estate. A number of activities were carried on upon the estate, which had been managed by the deceased. Some of these were ‘trading’ activities, like farming some of the land in hand, while others were more obviously ‘investment’ activities such as the letting of farms and cottages. Not surprisingly, the main issue was the question of whether the business was ‘wholly or mainly the making or holding investments’ which would have caused the relief to be refused pursuant to s105 (3) IHT Act 1984. However, a number of subsidiary points arose, such as whether the two year ownership requirement of s106 IHT Act 1984 had been satisfied in relation to part of the estate which originally been held in trust, but where the deceased had become absolutely entitled less than two years before his death. The taxpayer had succeeded before the First Tier Tribunal, and succeeded again before the Upper Tribunal when the Revenue appealed HMRC v Brander [2010] UKUT 300.