Ask an expert: Business property relief on furnished holiday lettings

Question

My clients a married couple own and run a bed and breakfast in partnership. The wife also owns a furnished holiday let (FHL) inherited from her grandparents a number of years ago. They are concerned about inheritance tax business property relief (BPR) and whether it applies to the FHL. It had previously been hoped that the outcome of the Pawson case would provide some comfort particularly as they provide additional services such as arranging tours but this now seems unlikely so they have asked if the position could be improved by merging the two businesses? This would seem to be a possibility following the cases of Farmer and Brander but I am concerned that these cases are narrowly aimed at landed estates and so would not apply...