Agricultural Property Relief is another tax relief, specifically designed to support agricultural businesses, providing an exemption from Inheritance Tax on certain agricultural property when it is transferred either during your lifetime or through your Will.
To qualify for Agricultural Property Relief, the assets must be agricultural property, including agricultural land or pasture, farm buildings, and farmhouses that are part of the agricultural land.  The property must be occupied for agricultural purposes and meet the "farming test", which includes certain conditions related to the size and commerciality of the agricultural activities carried out on the property.
The relief can also exempt the farmhouse from Inheritance Tax in certain situations. In relation to both the farmhouse and any agricultural buildings and land, even though 100% Inheritance Tax relief may be available, this relief only applies to the agricultural value and not the full market value of the assets meaning it is often not a full exemption from Inheritance Tax as it may appear.
As with Business Property Relief, the availability of Agricultural Property Relief will depend greatly on your own personal situation and agricultural portfolio.  Our expert Tax Advice and Planning team can assist you with understanding the eligibility and extent of relief available to allow you to efficiently plan for your future.