The availability of low power short range wireless technologies, such as Bluetooth, is enabling compact handheld devices to be connected to information networks for mobile and ubiquitous computing. The usage model assumed is that mobile devices connect to nearby access points which in turn are connected to an external network. This model provides an alternative to the expensive 3G mobile networks and benefits the user through higher bandwidths, lower costs and other location specific services not feasible over 3G. A key issues here is providing mobility. The mobile may move out of the range of one access point into that of another and a handoff would be required. In this paper, we first survey the various options for implementing handoff. We then adapt Cellular IP for use in a Bluetooth based access network and propose a new handoff protocol which exploits the specific features of the Bluetooth link layer. Simulations reveal that our proposed scheme reduces the handoff delay by more than an order of magnitude and has enhanced datarate capabilities compared to pure Cellular IP. The number of mobile handhelds supported at the access points is also increased.