Passing on agricultural property - introduction
Agricultural property relief provides relief from inheritance tax on transfers of agricultural property. It is available for:
- transfers on death;
- transfers by way of lifetime gifts; or
- chargeable occasions in respect of agricultural property held in trust.
Agricultural property consists of farm land and buildings. The relief is available if there is a transfer of value and the whole or part of the value transferred is attributable to either:
- the agricultural value of agricultural property; or
- the part of the value of shares or securities in a farming company that can be attributed to the agricultural value of agricultural property owned by the company.
As the relief applies only to the agricultural value of land and buildings, further relief can only be given by way of business property relief (provided the conditions are satisfied) for:
- moveable property; and
- the value of land and buildings in excess of the agricultural value (for example the development value of agricultural land).
The relief is available for agricultural property that is either owner-occupied or let, provided the conditions for the minimum period of ownership and occupation for agricultural purposes are met.
Generally, the relief is not available if the agricultural property is subject to a binding contract for sale. The exceptions are where the sale is:
- on incorporation of a farming business; or
- for the purpose of reconstruction or amalgamation.
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