I7.307 Cottages, farmhouses and other buildings

IHT, trusts and estates

I7.307 Cottages, farmhouses and other buildings

I7.307 Cottages, farmhouses and other buildings

A 'cottage' is commonly considered to be a dwelling of someone employed for agricultural purposes in connection with the property. It therefore assumes that there is also a farmhouse1.

The test for farm cottages is whether they are of a type and number which might reasonably be expected to be found on the farm estate. An important but not decisive factor would be the number of employees required to work on it. Where a cottage that might satisfy IHTA 1984, s 115(2) is temporarily vacant, but is genuinely being held for the purposes of agriculture, HMRC may treat it as satisfying IHTA 1984, s 117.

In considering whether cottages, farm buildings or farmhouses are 'of a character appropriate to the property'2, HMRC will consider whether they are proportionate in size and nature to the requirements of farming activities one might expect to find conducted on the qualifying 'agricultural property' by a fit and able person occupying the property for the purposes of agriculture at the date of transfer.

The history and traditional appearance of a 'farmhouse' will not in themselves determine the matter. The way a property has been, or would be, described for sale may be taken into consideration, as well as the type, size and quality of other agricultural properties in the area. The reasonable level of income which could be derived from the unit will be considered. The question of character appropriateness must be decided upon what existed at the property at

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