Chapter IHTM24140

Published date20 March 2016
Record NumberIHTM24140
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

Once you have established that you are dealing with agricultural property (IHTM24030) that is occupied for agricultural purposes (IHTM24060), you will need to establish the rate of agricultural relief that is due.

There are two rates of agricultural relief for IHT:

  • a higher rate at 100%. Originally this rate of relief was intended to benefit working farmers. It was available where the deceased/transferor’s interest in the property immediately before the transfer carried with it the right to vacant possession (IHTM24141) or the right to obtain it within the next twelve months [IHTA84/S116 (2)(a)]. Over time the circumstances in which the higher rate of relief is due has been extended to cover a number of additional situations, described below, where the deceased / transferor let land.
  • a lower rate at 50% for other let land.

With effect from 10 March 1992 under F(No2)A92/SCH14/para8 & 9,

Before 10 March 1992 the rates of relief were:

  • the higher rate was 50%
  • the lower rate was 30%.

The situations where the higher rate of relief applies are as follows:

  • where the interest of the deceased/transferor in the property immediately before the transfer carries with it the right to vacant possession (IHTM24141) or the right to obtain it within the next twelve months, IHTA84/S116 (2)(a). This will include land let on grazing licences (IHTM24142), which are essentially for less than a year
  • ESC F17 applies (IHTM24144) to extend the period of 12 months specified in IHTA84/S116(2)(a) to 24 months
  • property is let on a tenancy beginning on or after 1 September 1995 (IHTM24240)
  • the transitional provisions (IHTM24145) for let property apply, IHTA84/S116 (2)(b)

Where, in relation to a...

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