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Chapter IHTM24053

Cited authorities 1 Cited in Related
Vincent
Published date20 March 2016
Record NumberIHTM24053
CourtHM Revenue & Customs

This case was heard by the First Tier Tax Tribunal in March 2011 and followed a determination by HMRC that the deceased’s farmhouse was not agricultural property in accordance with IHTA84/S115(2). HMRC argued that the house was not of a character appropriate (IHTM24050) to the agricultural land owned by the deceased. The Tribunal found in the taxpayer’s favour.

HMRC were prevented by order of the Tribunal from arguing that the house was not a ‘farmhouse’ under IHTA84/S115(2), so the case was heard on character appropriate grounds only.

Facts of the case

The deceased began his working life as a farmer. His father purchased the farm, which comprised 16.29 acres, for him in 1940 and it remained unchanged at the time of the deceased’s death in 2007. The deceased raised his family of two children from the farm and during his lifetime the deceased rented 3 acres of land from the local water company but this was given up in 1985.

The farming activity at its peak consisted of 600 free range chickens, 7 to 10 cattle, milk, wheat, barley, oats, fruit and vegetables. The farming operations reduced in 1985 and in the relevant period before his death the deceased kept 70 hens and sold eggs from the farmhouse. He had several regular customers until his death.

There were a number of specific facts which were relevant to the Tribunal’s decision:

  • HMRC accepted that the provisions of IHTA84/S117 were satisfied (IHTM24060) as evidenced by the deceased’s self assessment returns.
  • The deceased had 67 years unbroken farming history on the land.
  • The farmhouse and land had remained unchanged over that period. The house was in need of modernisation and serious repairs. The roof had failed and was held up internally and covered externally with a tarpaulin.
  • The deceased raised his family solely from the farm.
  • The deceased was declaring taxable profits from his farming activities through the self assessment system until his death.

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