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Vigne - HMRC lose business property relief case

04 September 2017. Published by Alexis Armitage, Senior Associate

In The Estate of Maureen W Vigne (deceased) v HMRC [2017] UKFTT 632 (TC), the First-tier Tribunal (FTT) has determined that the estate of the late Maureen Vigne (the deceased) was entitled to business property relief (BPR), as provided for in section 105, Inheritance Tax Act 1984 (IHTA).


The deceased died on 29 May 2012. At the time of her death, she was the sole owner of a livery business with approximately 30 acres of land. Following her death, the deceased's personal representatives (the Appellants) claimed:

(i) BPR on the basis that the asset constituted 'relevant business property', for the purposes of section 105, IHTA; and/or, 

(ii) agricultural property relief (APR) on the basis that the asset constituted 'agricultural property', for the purposes of section116, IHTA. 

HMRC issued a determination under section 221, IHTA, refusing both claims. 

The Appellants appealed the determination.

FTT's decision

The appeal was allowed.

It was common ground that the deceased operated a business and that there was property that could properly be described as 'business property', associated with and necessary for the carrying on of that business. The issue between the parties was whether the business was a business which consisted mainly of holding investments. HMRC's position was that if a livery business was operated, which necessitated land being available for it to be viable, that is nonetheless the holding of an investment and the entire business should be characterised as a business of holding investments. The Appellants' position was that the deceased did not operate an investment business, nor did her business consist of 'holding investments'.

HMRC argued that the deceased had run a business and that the property was 'business property associated with and necessary for carrying on that business'. In support of its contentions, HMRC relied on the hours worked by the yard manager, the labour costs incurred and the profitability of the business. In the view of HMRC, these activities were insufficient to constitute anything more than 'holding investments'. 

The Appellants contended that the services provided were over and above those included at the lower scale of livery provision. These extra services included the provision of worming products for the horses; providing horses with hay feed during the winter with a hay crop grown on the land; removing horse manure from the fields; and a daily health check of the horses.

The FTT said that it was in no doubt that the business was a genuine livery business which was developed so as to be a recognisable livery business offering significantly more than the mere right to occupy a particular parcel of land. It was satisfied that a business was being run from and on the land which did provide services to those who kept their horses on the land and that no properly informed observer would have said that the deceased was in the business of ‘holding investments'.

The Appellants' appeal in relation to the APR claim was unsuccessful. In the FTT's view, an 'objective observer' would not have thought agricultural activities were taking place on the land and equine activities are not usually characterized as agricultural for the purpose of section 115(4), IHTA. 


This decision will be welcomed by taxpayers. Many landowners may now benefit from BPR in circumstances where previously HMRC would have rejected a claim for BPR, provided it can be demonstrated that valuable services are provided. The facts of this case are of course specific and care will therefore need to be taken when seeking to apply the decision to other fact patterns. 

A copy of the decision can be found here.


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