Q&As

A Will contains a standard Nil Rate Band Discretionary Trust clause leaving 'the largest sum of cash which could be given on the trusts of this clause without inheritance tax becoming due in respect of the transfer of the value of my estate I am deemed to make immediately before my death'. There is farmland qualifying for 100% agricultural property relief (APR) in the estate. If this farmland is appropriated to satisfy the legacy, as the Will allows, is it the open market value only that is taken into account when making the transfer or the value reduced by the APR? If so, would the APR be diluted by the effect of section 39A of the Inheritance Tax Act 1984?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 05/07/2021

The following Private Client Q&A produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • A Will contains a standard Nil Rate Band Discretionary Trust clause leaving 'the largest sum of cash which could be given on the trusts of this clause without inheritance tax becoming due in respect of the transfer of the value of my estate I am deemed to make immediately before my death'. There is farmland qualifying for 100% agricultural property relief (APR) in the estate. If this farmland is appropriated to satisfy the legacy, as the Will allows, is it the open market value only that is taken into account when making the transfer or the value reduced by the APR? If so, would the APR be diluted by the effect of section 39A of the Inheritance Tax Act 1984?
  • Agricultural Property Relief
  • Appropriation
  • Summary

A Will contains a standard Nil Rate Band Discretionary Trust clause leaving 'the largest sum of cash which could be given on the trusts of this clause without inheritance tax becoming due in respect of the transfer of the value of my estate I am deemed to make immediately before my death'. There is farmland qualifying for 100% agricultural property relief (APR) in the estate. If this farmland is appropriated to satisfy the legacy, as the Will allows, is it the open market value only that is taken into account when making the transfer or the value reduced by the APR? If so, would the APR be diluted by the effect of section 39A of the Inheritance Tax Act 1984?

Agricultural Property Relief

Agricultural relief applies to agricultural property as defined in section 115(2) of the Inheritance Tax Act 1984 (IHTA 1984) and, as here, can be 100% if the relevant conditions are satisfied.

See Practice Note: IHT—agricultural property relief and Gov UK Guidance: Agricultural relief

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