Serviced offices and BPR: when do additional services change the answer?
Ordinary property investment businesses generally do not qualify for inheritance tax Business Property Relief (BPR). That is the starting point, rather than a surprising new development.
The more useful question is where a serviced-office operation sits: when does the service offering change the character of the business sufficiently to take it outside the investment-business exclusion?
What Beresford decided
In The Executors of Keith Denis Lewis Beresford (Deceased) v HMRC [2026] UKUT 285 (TCC), the Upper Tribunal (Tax and Chancery Chamber) considered a company combining conventional lettings with serviced offices. Judgment was given on 29 July 2026.
The Tribunal found that heating, electricity and air-conditioning were non-investment services, correcting the First-tier Tribunal’s analysis. But those services were insufficiently material to change the character of the facility-fee package: predominantly office occupation.
It set aside and remade the decision, confirmed HMRC’s determination and dismissed the appeal against it. BPR remained unavailable.
The distinction matters: identifying some non-investment activity does not establish that the business as a whole escapes the exclusion. Nor must those services be separately invoiced to be recognised.
The judgment requires an assessment in the round; it is not a blanket rule against serviced offices.
What should owners examine?
For an owner whose succession plan assumes BPR, our practical recommendation is to commission an evidence-based review before relying on that assumption.
Useful questions include:
- What do customers receive under the actual agreements?
- Which services go beyond managing and maintaining the property?
- What do the records show about staffing, costs, income and the customer offering?
- Does the written tax analysis explain the whole operation, including activities that point towards investment?
- What would the family’s inheritance tax exposure look like if relief were refused?
Those questions should produce a reasoned conclusion, rather than a list of services presented as a guarantee.
Activity and branding do not settle the issue
HMRC’s manual explains that active management can still be consistent with holding investments. The substance of the operation matters. HMRC IHTM25273.
Calling an operation “serviced”, or documenting how busy its owner is, should therefore start the discussion rather than conclude it.
Review the boundary, not just the label
The planning priority is to identify where the claim is strong, where it is uncertain and what happens if it fails. That gives the owner and family a basis for decisions about succession, funding and risk.