Holiday home owners who let their properties have been delivered a blow from the Upper Tribunal, which has quashed a landmark ruling allowing relief from inheritance tax (IHT).
Around 65,000 owners of furnished holiday home lets could now be hit with IHT bills after the ruling, which overturns a previous verdict allowing owners to claim business property tax relief, according to the Financial Times.
HM Revenue & Customs has sought to apply a stricter interpretation of where business property relief was available for IHT purposes, treating holiday home lets as other investments, with only those providing a substantial amount of services to holiday makers able to get the relief.
However last year a tribunal ruled they should not be considered as investments, in a move that was expected to open the door to a flood of claimants.
But that verdict has been overturned by last week's ruling, which means holiday homes will be treated like other assets, counting towards a person's estate at death.