Wheatley's Executors v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judgment Date | 05 March 1998 |
| Date | 05 March 1998 |
| Court | Special Commissioners (UK) |
special commissioners decision
Mr THK Everett.
Mr Michael Billington, solicitor of Pennington's for the appellant.
Mr Peter Twiddy, assistant director, Capital Taxes Office.
Inheritance tax - Agricultural property - Meadow owned by deceased subject to grazing agreement - Horses used for leisure purposes - Such use did not constitute occupation for the purposes of agriculture - Appeal dismissed - Inheritance Tax Act 1984 section 117Inheritance Tax Act 1984, s. 117.
Mr Peter John Wheatley and Mr Hugh William George Maxwell ("the Executors") as Executors of the Will of Walter Wheatley deceased, who died on 17 February 1997, each appeal against similar Notices of Determination, each dated 17 November 1997, served upon them by the Respondent Commissioners.
Each Notice states as follows:
The Commissioners of Inland Revenue have determined - in relation to the deemed disposal for the purposes of Inheritance Tax on the death of Walter Wheatley on 17 February 1997, that the five acre field known as Bowes Bridge Meadow, Littlehampton was not occupied for the purposes of agriculture within the meaning of Inheritance Tax Act 1984 section 117section 117 Inheritance Tax Act 1984.
The agreed question for my determination is whether Bowes Bridge Meadow, Littlehampton, which formed part of the estate of Walter Wheatley at his death on 17 February 1997 was occupied prior to his death for the purposes of agriculture within the meaning of Inheritance Tax Act 1984 section 117section 117 Inheritance Tax Act 1984.
The evidence before me consisted solely of a brief agreed statement of facts supplemented by a copy of a grazing agreement dated 1 May 1996.
The agreed statement of facts reads as follows:
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1. Included in the estate of Walter Wheatley ("the Deceased") at his death on 17 February 1997 was the freehold interest in Bowes Bridge Meadow ("the Meadow") at Littlehampton, 2.188 hectares in extent.
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2. The Meadow was owned by the Deceased throughout the period of seven years prior to his death.
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3. In each of those seven years the Meadow was subject to a grazing agreement from 1 May to the following 31 March between the Deceased and Melissa Warren. During the months of April the Meadow was vacant.
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4. During the term of each grazing agreement (an example of which follows):-
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(a) the only livestock put in the Meadow by the grazier were horses;
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(b) the Meadow was used for the purposes of feeding the horses, and not for the purposes of rearing or breeding them.
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The sample grazing agreement put in evidence reads as follows:
An agreement made the 1st day of May 1996 between Walter Wheatley of Kingsmead Wishanger Estate, Churt, Farnham in the county of Surrey (hereinafter called the "Owner") of the one part and Melissa Warren of Thelton House, Crossbush, Arundel, West Sussex (hereinafter called the "Grazier") of the other part.
Whereby it is agreed as follows:
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1. The Grazier shall be entitled during the season or period beginning on the date hereof and ending the 31st day of March 1997 following to graze that part of the land edged in red on the attached plan owned by the owner aforesaid.
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2. The Grazier shall pay the Owner for the said right a sum of £590 (Five hundred and ninety pounds) by four equal instalments each of £147.50 (One hundred and forty-seven pounds and fifty pence) payable on the 1st day of May, the lst day of August, the lst day of November 1996 and the 1st day of February 1997.
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3. The Grazier shall fence and keep all fences, gates, ditches and water causes in good condition and shall at her risk maintain them in a condition to prevent her stock straying or being injured.
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4. The Grazier shall keep indemnify the Owner against damage caused by her neglect and the straying of her horses.
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5. The Grazier shall properly cut or pull up thistles or any other noxious weeds on the land and shall keep the land clear of moles.
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6. The Grazier shall use only horses for the purpose of grazing the said land and shall not allow the land to be entered or in any way used by donkeys, or asses, goats, pigs, poultry or any vicious unruly destructive infected or diseased animals. In the event of the Grazier admitting any animal on the land in contravention of the clause the Owner shall be at liberty to treat the animal as a trespasser and impound the same at the expense of the Grazier and the Grazier shall be liable for all loss or damage occasioned by any such animal either by straying or in any other way.
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7. This agreement shall at all times be construed as a personal agreement with the Grazier for the grazing of animals owned by the Grazier and shall not be assignable by the Grazier. Any use of the land or part thereof by the Grazier otherwise than for grazing animals controlled by her shall be a breach of the agreement.
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8. The Owner reserves all game (including ground game) on the land, all rights of way hitherto used or enjoyed over the land and the right for himself, his family, servants and visitors to enter upon the land at any time for any purpose other than grazing beasts there.
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9. The Owner warrants that the Grazier for the duration of this...
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Dixon v Commissioners of Inland Revenue
...was necessary to look at the situation on the occasion of the two disposals in 1994 and 1998. He cited Wheatley's Executors v IR Commrs (1998) Sp C 149. 44 In Wheatley the deceased owned a meadow which was used solely for the purposes of feeding horses. It was common ground that the meadow ......