IHT - Inheritance Tax Planning

Charles Wreford-Brown, FRICS, FAAV, Rural and Agricultural Property

Once again the importance of proper Inheritance Tax advice has come to the fore: The Inspector of Taxes and District Valuers are now instructed on the valuation of landed property for IHT purposes to pursue every avenue to maximise tax.

Recent key cases decided in front of the Special Commissioners focused on Business Property Relief (BPR). These are vitally important as Agricultural Property Relief (APR) only covers the agricultural value of any land and property, it does NOT cover such items as cottages and/or land let out on a non-agricultural basis, potential diversification on farms and development value. It is therefore now paramount that client's considering Inheritance Tax mitigation take the correct advice. It is likewise important if rearrangement of family farming assets and businesses is to take place, before proceeding to transfer the assets, that proper tax advice is taken as this can generate unexpected tax liabilities. A farmer looking to slow down/retire can no longer hand the whole farm over to a contractor and assume that a once a year “handshake” will be sufficient to ensure continuance of farming to qualify for APR. Proper grass agreements are important, the method by which these agreements are adhered to and where payments are made is similarly important, with a proper record of the paper trail being kept.

We are happy to advise on valuation and other tax planning arrangements, together with Agreements for land occupation. Call us on 01364 646175.