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Chapter IHTM24113

Document Cited authorities 2 Cited in Related
Vincent
Published date20 March 2016
Record NumberIHTM24113
CourtHM Revenue & Customs

Example

A owns and farms Orchard Farm and has done so for a number of years.

In October 1988, A sells Blackacre for £600,000 and buys Manor Farm for £800,000 to increase the scope of his farming operations. Both transactions are at arm’s length. Both prices are wholly attributable to agricultural value.

In April 1990, A dies. Manor Farm then has an agricultural value of £1,000,000. The two year occupation condition in IHTA84/S118 (1) is satisfied.

A practical way to give effect to IHTA84/S118 (3) in such circumstances is to adopt the following apportionment:

  • The agricultural value of Orchard Farm at time of sale (on the facts, the sale price), divided by
  • the agricultural value of Manor Farm at the time of the purchase (on the facts, the purchase price), multiplied by
  • the agricultural value of Manor...

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