Kent Solicitors

If you can show the Revenue that your 'home' on your 'farm' is a 'farmhouse', you will be entitled to 100% relief on the value of that property for Inheritance Tax purposes. (Agricultural Property Relief, 'APR')

However, just because your house is situated on your farm, does not automatically make it a 'farmhouse'.

For your house to be eligible you must show:-

1. That the house is in fact agricultural property or
2. The house is of a 'character appropriate' to the property
3. There is no contract for sale
4. Vacant possession will be available within 2 years or a tenancy to the property was created before 1 September 1995.

Agricultural property does not automatically include farm buildings, cottages and farmhouses.

A farmhouse must be a dwelling for the farmer from which the farm is managed. The farmer of the land is deemed to be the person who farms it on a day to day basis, not necessarily the person who is in overall control of the agricultural business

If the size of the house is out of proportion to the size of the land, then APR will not be available.

The 'educated rural layman' test applies, that is, would the average man on the street consider the house to be a farmhouse or a large country house with farmland?

For further information contact Vanessa Adamson at Kaslers Solicitors LLP 01622 844607.

Labels: tax agricultural property