APR and BPR on foreign property

By Tolley in association with Elizabeth Norton at Russell-Cooke Solicitors

The following Trusts and Inheritance Tax guidance note by Tolley in association with Elizabeth Norton at Russell-Cooke Solicitors provides comprehensive and up to date tax information covering:

  • APR and BPR on foreign property
  • Agricultural Property Relief
  • How to claim a repayment of UK IHT
  • When APR applies
  • Potential difficulties in applying APR to property sited outside the UK
  • Business Property Relief
  • Rates of relief
  • Qualifying conditions for BPR

This document discusses the conditions required to qualify a property for BPR and property that fail to qualify for BPR. It also covers valuation issues, withdrawal of business property.


The Finance Act 2009 amended IHTA 1984 in order to extend APR for UK inheritance tax to the European Economic Area (EEA). It had hitherto only applied in relation to agricultural property in the UK.

IHTA 1984, s 115 (5)

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

Agricultural Property Relief

APR provides relief on UK inheritance tax payable on lifetime transfers or on death. The relief will be either 50% or 100% of the UK inheritance tax payable on the agricultural value of the property. In order for a property to qualify for relief at 100%, it is necessary for one of three conditions to be satisfied:

  • that the transferor has the right to vacant possession on the transfer, or the right to obtain it within 24 months
  • that the transferor has been beneficially entitled to the interest since before 10 March 1981 and satisfies the transitional provisions contained in IHTA 1984, s 116(3)
  • that the property is let on a tenancy beginning on or after 1 September 1995

All other properties which qualify for APR will be subject to relief at 50%.

It should be noted that the agricultural value is not necessarily the market value and BPR, which could often apply to the same property as APR, may well provide a greater tax saving.

See the Agricultural value and development value guidance note and other notes in the APR Planning sub-topic.

APR was extended to the EEA following a press release by the European Commission stating that it did not consider the legislation to be compatible with the free movement of capital.

The extension to the EEA came into effect on 22 April 2009

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