HYDRO HOTEL, EASTBOURNE, PLC
Chairman's letter to Shareholders 9 July 2008
Inheritance Tax - Qualification of the Company's Shares for "Business Property
At the AGM in April the question was raised whether the company's shares
continue to qualify for "Business Property Relief" for the purposes of
Inheritance Tax. This is the provision whereby under current tax law the value
of the company's shares included in a lifetime transfer or on death may be
reduced by 100% so that no inheritance tax is charged thereon.
The relief is subject to a number of qualifications. Some of these relate to
the way the company's shares are traded and the nature of its business
activities, and these are matters that the Board has reviewed. Other
requirements relate to the individual transferor shareholder's personal
circumstances, in particular the provision that the shares must usually have
been owned by the transferor for a minimum of two years. These are matters for
the individual shareholder and are not the concern of the Board.
We have reviewed the company's business activities in relation to the
Inheritance Tax Business Property Relief rules, and we have also referred the
question to our auditors PKF (UK) LLP (PKF) for their opinion. We have
concluded, with PKF's approval, that as at 30th April 2008, the company's
shares continued to meet the qualification requirements which will enable a
transferor shareholder with the appropriate personal circumstances to benefit
from Business Property Relief in full. There have been no material changes to
the company's position in this respect since that date.
Shareholders should be aware that tax legislation is complex and liable to
change at any time, and indeed retrospectively, and they should in every case
obtain professional advice on their circumstances before acting or refraining
from acting on their affairs or planning for the future. The information in
this letter is given in good faith, but it does not purport to be professional
advice on any shareholder's affairs, nor to be advice to any prospective
shareholder, and shareholders or prospective shareholders should not rely upon
it but must consult their own professional advisers.
Graeme C King
The Directors of Hydro Hotel, Eastbourne, plc accept full responsibility for the contents of this announcement