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Minimising Inheritance Tax through Agricultural Property Relief – not always a foregone conclusion

Reasons to choose Wilson Browne

When it comes to reducing your estate’s inheritance tax bill, if you’re involved in the farming industry there’s no doubt that you should be made aware of Agricultural Property Relief (APR).

Land or pasture that you use to grow crops or rear animals on can be passed on in accordance with your Will with a full relief from inheritance tax.

But do not assume it will be granted. The recent case of Charnley v HMRC [2019] is a poignant reminder that HMRC and yourself may not agree on everything you consider to be in agricultural use.

Here HMRC attempted to add a hefty amount on to the deceased farmer’s inheritance tax bill. They made the argument that because the deceased rented out his agricultural land to graziers, and his personal farming duties were minimal, APR should be refused on several of the deceased’s barns and outbuildings.

After a detailed review of exactly what the farmer’s role was in the setup, and a consideration of the case of Atkinson which reviewed the “wide range of activities that can constitute agriculture” HMRC’s decision was reversed and APR was granted.

There are stringent requirements to be met for APR to be granted, with the requirements subject to ongoing changes; it is not always a foregone conclusion that you will be able to claim the benefit of it.

Wilson Browne Solicitors are experts in drafting Wills and protecting your wealth and assets, agricultural or otherwise. We highly recommend consulting our team now to ensure you are doing everything required to make sure your estate does not fall upon an unwanted and unexpectedly large tax bill.

Within our team of experts, our Partner Neelam Maher is a member of the Agricultural Law Association and holds vast experience and knowledge on this topic.

George Iles

Posted:

George Iles

Trainee Solicitor

George is a Trainee Solicitor currently working with the Commercial Property team.