APR

By Tolley in association with Julie Butler
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The following Trusts and Inheritance Tax guidance note by Tolley in association with Julie Butler provides comprehensive and up to date tax information covering:

  • APR
  • What is agricultural property relief (APR)?
  • Definition of agricultural property
  • Stud farming
  • Rates of APR
  • Conditions of ownership and occupation
  • Agricultural property owned by companies

What is agricultural property relief (APR)?

APR is given by virtue of IHTA 1984, s 116:

“Where the whole or part of the value transferred by a transfer of value is attributable to the agricultural value of agricultural property, the whole or that part of the value transferred shall be treated as reduced by the appropriate percentage.”

The ‘appropriate percentage’ is either 50% or 100%, with the rate of relief depending on the nature of the property, the interest held and whether certain conditions are met.

Definition of agricultural property

APR applies only to agricultural property, which is defined in IHTA 1984, s 115(2) as follows:

“'Agricultural property' means 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 farmhouses, together with the land occupied with them, as are of a character appropriate to the property”

Examples of activities that are deemed to be agriculture are:

  • cultivation to produce food for human and animal consumption
  • use to support livestock kept to produce food or other products such as wool
  • use to support farmworking animals
  • nurseries growing seeds and plants to produce flowers, trees and turf, as well as food crops
  • breeding of horses
  • hop growing
  • short rotation coppice
  • energy crops

Examples of activities that are not deemed to be agriculture include:

  • music festivals

More on IHT reliefs: