APR and BPR on foreign property
Produced in partnership with Andrew Godfrey and Jenny Cooper of Russell-Cooke Solicitors
APR and BPR on foreign property

The following Private Client guidance note Produced in partnership with Andrew Godfrey and Jenny Cooper of Russell-Cooke Solicitors provides comprehensive and up to date legal information covering:

  • APR and BPR on foreign property
  • Agricultural property relief
  • Potential difficulties in applying APR to property sited outside the UK
  • Business property relief

Broadly speaking, UK inheritance tax (IHT) is payable on lifetime transfers or on death on any foreign assets owned by an individual domiciled (or deemed domicile) in the UK. In some circumstances, agricultural property relief (APR) and business property relief (BPR) may be available and provide relief on IHT payable on foreign assets. Even if APR or BPR applies to IHT, death or capital taxes may still be due in the country where the assets are situated.

As a response to the binding decision of the European Court of Justice in Theodor Jaegar v Finanzamt Kusel-Landstuehl, the Finance Act 2009 amended the Inheritance Tax Act 1984 (IHTA 1984) in order to extend APR for IHT to the EEA from 23 April 2003. Prior to this, APR had only applied in relation to agricultural property in the UK.

BPR is available in relation to relevant business property situated anywhere in the world.

Following the UK’s departure from the EU on 31 January 2020, it remains to be seen what the impact of ‘Brexit’ and the outcome of the UK government’s forthcoming negotiations will have on the availability of the reliefs in the future to a UK domiciled transferor with agricultural or business property in the EEA.

Agricultural property relief

APR provides relief on IHT payable on lifetime transfers of agricultural property (including failed potentially