IHT Relief and agricultural estates - A victory for the taxpayer
01 September 2010
The result of the HMRC appeal in the Balfour case was published last week. This concerned whether inheritance tax business property relief (BPR) was available on a Scottish agricultural estate which comprised a mix of in-hand farms and let land and cottages.
The IHT legislation provides that BPR is not available on a business which wholly or mainly holds investments (such as let land and cottages) rather than trading assets.
In the case of an estate with a mix of in-hand and investment activities an assessment is required of which type of activity predominates.
In Balfour (sometimes also known as Brander) the appeal tribunal agreed with the earlier decision that BPR should be available on the whole estate even though in terms of capital value the investment properties were more valuable than those used on the trading side.
Further analysis of this case will be available in due course in our Private Client Briefing and Agricultural Law Quarterly briefings. However, if you have any questions in the meantime please contact Tom Hewitt on 0117 902 2717 or by email: email@example.com