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Chapter IHTM24150

Document Cited authorities 1 Cited in Related
Vincent
Published date20 March 2016
Record NumberIHTM24150
CourtHM Revenue & Customs

Agricultural relief is given by reference to the agricultural value of agricultural property, (IHTM24030) IHTA84/S116 (1). The agricultural value is defined by s.115(3) IHTA 1984 as the value the agricultural property would have if it were subject to a perpetual covenant prohibiting its use otherwise than as agricultural property. In the case of property within the European Economic Area (IHTM24256) but outside the United Kingdom, Channel Islands and Isle of Man, the agricultural value is the value as if it were subject to provisions equivalent to that covenant.

In some cases, the agricultural value of the property may be less than the open market value. This might be because of development value (IHTM24151) or mineral value (IHTM23197), or because the farm is in a desirable part of the country and suitable for commuters (IHTM24165). Prospective purchasers of farms now may be interested in the property because they want to use the farmhouse as a residence or for some other reason not directly connected with agriculture. In these circumstances purchasers may be prepared to pay a price above that which would be achieved if the property were subject to the perpetual covenant of Section 115(3). This higher price may be obtained even if the successful purchaser intends to farm the land after buying it.

The Lands Tribunal considered the assessment of agricultural value in the case of Lloyds TSB (Personal representatives of Rosemary Antrobus Deceased v. Commissioners of Inland Revenue (Antrobus No.2). The Tribunal considered evidence on the effect of the perpetual restrictive covenant in Section 115(3), and agreed with the District Valuer’s view that it was extremely limiting. In the case of Antrobus No.2 the Tribunal accepted the District Valuer’s conclusion based on his evidence of other settlements and sales of properties with agricultural occupancy planning conditions, and...

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