IHT—agricultural property relief
Produced in partnership with Hayden Bailey and Gabrielle Dewes of Boodle Hatfield
IHT—agricultural property relief

The following Private Client guidance note Produced in partnership with Hayden Bailey and Gabrielle Dewes of Boodle Hatfield provides comprehensive and up to date legal information covering:

  • IHT—agricultural property relief
  • General principles
  • The rate of APR
  • Ownership and occupation requirements
  • Vacant possession property
  • 100% Relief: tenanted properties
  • Farmhouses
  • Recapture charges
  • Agricultural property of companies
  • Contracts for sale
  • more

Agricultural property relief (APR) was provided for from the outset when capital transfer tax was introduced by the Finance Act 1975. The nature of the relief has changed significantly over the years and it is now extremely generous in many cases. APR should be considered in conjunction with business property relief (BPR). Although APR applies in priority to BPR where both reliefs apply there are cases where the APR will not apply to agricultural land or an element of its value and in such cases BPR may be applicable.

General principles

APR applies so as to reduce the value of a transfer of 'agricultural property' by the appropriate percentage (ie 100% or 50%) of the value of that transfer which is attributable to the 'agricultural value'. The relief also applies to charges arising on discretionary trusts (under Chapter III of Part III of the Inheritance Tax Act 1984 (IHTA 1984)).

Agricultural property is defined to mean:

'agricultural land or pasture and includes woodland and any building used in connection with the intensive rearing of livestock or fish if the woodland or building is occupied with agricultural land or pasture and the occupation is ancillary to that of the agricultural land or pasture; and also includes such cottages, farm buildings and farm houses, together with the land occupied with them, as are of