Earlier this year a case was taken before the commissioners about new properties which were being built for resale.Due to various circumstances some properties were being rented out in the short term.The properties were however shown as stock on the companies balance sheet as the ultimate intention was to still sell them on when conditions changed.

One of the shareholders died and the question arose as to whether business property relief for inheritance tax was available .HMRCs view was that the rented properties were excepted assets and did not qualify.The executors case was that they were still stock and therefore part of the companies trading assets.

Evidence was produced about the companies intentions and it was held that the assets held in stock had not become investment assets and therefore the relief applied.

Clearly thr treatment in the accounts and the intentions of the company were highly relevant .