Agricultural property relief (APR)

By Tolley
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The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Agricultural property relief (APR)
  • Agricultural property
  • Agricultural value
  • Other points
  • APR on shares
  • APR on farmhouses

APR reduces the value transferred for inheritance tax purposes when assets such as farmland and farm buildings are gifted either during lifetime or on death. APR works in a similar way to Business Property Relief (BPR) ― for guidance on this, see the Business property relief (BPR) guidance note. See also Simon’s Taxes Division I7.3 (subscription sensitive).

APR is given before any available annual exemptions, and is either available at 50% or 100%.

Value transferredX
Less: APR @ 50%/100%(X)
 X
Less: annual exemptions(X)
Chargeable transferX

If an individual dies and his estate includes agricultural property, APR is also given as a deduction in the estate when calculating death tax. The relief is automatic and no formal claim is required.

IHTA 1984, s 115
Agricultural property

Agricultural property means either agricultural land or buildings, used for the purposes of farming and situated either in the UK, the Channel Islands, the Isle of Man or an EEA State.

IHTA 1984, s 115(2),(4)

Agricultural property relief is primarily available in two situations:

  • to a farmer who owns the land and buildings and use

More on Passing on the family business: