Second homeowners exempt from inheritance tax

Those with a second home abroad, which they have perhaps bought using an international money transfer system, might be exempt from inheritance tax if they let it out to holidaymakers, an industry expert has said.

A lot of properties abroad can be very valuable and can be owned by wealthy people, explained DHC Accounting.

If properties are owned for two or more years, then as well as receiving an extra income from letting it out, it can also qualify the owner for other monetary advantages.

"The biggest benefit is that for inheritance tax purposes it is treated as business", explained director of the firm Tony Briscoe, adding that second homeowners could be exempt from paying it.

According to research by Holiday Cottages Group, the economic climate is making over half (55 per cent) of people with more than one property plan to let out their holiday homes.

Figures also revealed that 63 per cent of Brits going on holiday are planning not to stay in a hotel - opting for apartments, villas and homes instead.