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Chapter IHTM24091

Cited in Related
Vincent
Published date20 March 2016
Record NumberIHTM24091
CourtHM Revenue & Customs

A farmhouse was defined in Rosser v IRC [2003] WTLR 1057 by the Special Commissioner as ’a dwelling for the farmer from which the farm is managed.’ Unless farming operations or management activities were conducted at the property it cannot be a farmhouse.

The typical problem case is one in which the deceased had formerly been a working farmer, either on theirs own account or as a member of a partnership, had retired and continued to live in the former farmhouse. They may also have retained some nominal farming activity. The bulk of the farmland may have been given to the family, sold or let. In such circumstances you may be able to conclude that at the date of death the house is neither agricultural property nor occupied for the purposes of agriculture. This is the situation in Rosser referred to above.

You should deal with a deduction for agricultural relief against the deceased’s residence on the grounds that it is a qualifying farmhouse as follows

  • If the deceased/transferor owned farmland and let it under a grazing licence and it is not clear to what extent the land was occupied for agricultural purposes (IHTM24061), you should obtain a copy of the licence or, if it was oral, a statement of its full terms. Land let on a grazing or mowing licence for less than one year at a time will not affect the deceased’s legal occupation of the land but could affect who is in occupation for the...

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