A serviced office company has been denied inheritance tax business property relief by the Upper Tribunal, which determined that the business was primarily involved in making or holding investments. The case, The Executors of Keith Denis Lewis Beresford v HMRC, concerned Fiveteam Limited, which owned Ninecourt Limited.
Ninecourt Limited operated serviced offices across four floors of a London building, offering services such as reception, telephone answering, reconfigurable offices, meeting rooms, and catering. This serviced office operation generated approximately 75% of the company's turnover over a five-year period and produced more gross profit than its conventionally let floors in four of those five years.
Despite the extensive nature of these services and the significant day-to-day activity involved, the Tribunal concluded that the core commercial purpose for customers was primarily the occupation of property. The judgment clarifies that factors like long working hours, substantial turnover, and a broad range of customer services are not, by themselves, decisive in determining eligibility for inheritance tax business property relief under sections 104 and 105 of the Inheritance Tax Act 1984.