Inheritance tax reliefs for farmers

Many farmers have failed to consider inheritance tax (IHT) planning; this could lead to a large IHT bill for those who have substantial farmland which may also have high development value. Proper IHT planning will ensure that you get the maximum IHT reliefs available for your farmland and businesses, including possible restructuring of the farming business.

The main reliefs to consider are:

Agricultural property relief (APR) 

Agricultural relief is available on the agricultural value of an agricultural property which is transferred as a lifetime gift or on death.

Agricultural property includes

  • agricultural land or pasture
  • woodland
  • building used in connection with the intensive rearing of livestock or fish
  • cottages, farm buildings and farmhouses, together with the land occupied with them, if they are of a character appropriate to the agricultural land or pasture.

 APR is available at 100%

  •  where the interest of the deceased/transferer in the property immediately before the transfer carries with it the right to vacant possession or the right to obtain it within the next twelve months
  • land let on grazing licenses
  • property is let on a tenancy beginning on or after 1 September 1995

 APR is available at 50% for other let land.

Business property relief (BPR)

Business Relief reduces the value of a business or its assets when working out how much Inheritance Tax has to be paid. Any ownership of a business, or share of a business, is included in the estate for Inheritance Tax purposes.

You can get 100% Business Relief on:

  • a business or interest in a business
  • shares in an unlisted company

You can get 50% Business Relief on:

  • shares controlling more than 50% of the voting rights in a listed company
  • land, buildings or machinery owned by the deceased and used in a business they were a partner in or controlled
  • land, buildings or machinery used in the business and held in a trust that it has the right to benefit from

It is essential that proper planning is undertaken to maximise the opportunities. Scrutton Bland has specialists in both agriculture and tax planning, and offers a no-obligation introductory meeting with one of our professional advisers.
Scrutton Bland Financial Panning is running a series of free seminars on Inheritance Tax planning. If you would like to know more about the tax, investment or legal aspects of Inheritance Tax please contact karen.free@scruttonbland.co.uk

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
Contact us on 01206 838400 or 01473 267000 or see www.scruttonbland.co.uk