Landlords ''can avoid inheritance tax''

If you are a landlord and you want to avoid inheritance tax then you should classify your properties as trade properties in order to get 100 per cent business property relief, according to one tax adviser.

Roy Maugham, who is a tax partner at UHY Hacker Young, says that if the property is a furnished holiday let for example then it can be classified as a trade property which will earn 100 per cent business property relief.

Failing to classify it as such means that the property falls into your estate which means it can be taxed upon your death.

In terms of capital gains tax bills, these can be reduced by reinvesting in venture capital trusts and classifying your property again as a trade property means your tax bill could be reduced to ten per cent.

Mr Maugham said: "If you are looking at an individual landlord and individual flats or houses, they might want to consider moving into the premises themselves for a while and establishing it as their own principal private residence because that could also help to mitigate the capital gains tax."


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