Agricultural Property Relief

Agricultural Property Relief is a relief from Inheritance Tax which is given on the agricultural value of UK agricultural property which has been:-

Owned and occupied by the owner for the purposes of agriculture for at least two years ending with the date of the transfer (death), or

Owned by the owner for seven years ending on that date, and occupied throughout (by the owner or someone else) for agricultural purposes. In practice, this will apply to let property.

Agricultural Property Relief is given at two rates: 100% and 50% depending on the circumstances. Agricultural property means agricultural land or pasture and also includes:

  • Woodlands and buildings used in the intensive rearing of animals if they are being used with agricultural land or pasture;
  • Grazing land you are responsible for the upkeep;
  • Cottages, farm buildings and farmhouses, and any land occupied with them, if they are of a character appropriate to the property and nature to the requirements of the farming activities conducted on the agricultural land in question.

Agricultural purposes includes general farming and the rearing of animals including horses on a stud farm. Each part of the property must be looked at separately, such as land, farmhouse, farm cottages and other buildings. Livestock and plant and equipment used in farming activities may attract Business Property Relief.

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