BPR on french leaseback properties? - USERNAME: roderickdhu
Tax Question: Is it safe for a UK based single retiree to invest in french leaseback properties with a view to claiming BPR (business property relief). The property is managed by the leasing company. The property is available for nearly all or all year depending if client wishes to use.It produces income so definitely a business. Meets all the conditions as far as I can see. Does financing make any difference? to eligibility. (Prob buy without.)but intention would be to use equity release on own main residence to raise the funds and lower the estate value as much and as quickly as possible and even further with accrued interest. Please hurry. Client 85. Have you knowledge of any challenges by HMRC in respect of overseas (European) property? Answer: There's likely to be a business the issue would be whether this would not qualify for BPR due to the business being one of "wholly or mainly holding investments". HMRC's view used to be that BPR could be available where:
• the lettings were short term, and
• the owner, either himself or through an agent such as a relative, was substantially involved with the holidaymakers in terms of their activities on and from the premises. However HMRC have recently stated: "…Recent advice from Solicitor's Office has caused us to reconsider our approach and it may well be that some cases that might have previously qualified should not have done so. In particular we will be looking more closely at the level and type of services, rather than who provided them…" In all cases the level of services provided would be crucial to establishing that it wasn't just an investment. If your client just holds the interest in the property and obtains a pretty much passive income I would say its unlikely BPR would apply.
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