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When Sundry Agricultural Land can qualify for APR

December 2015 - Published in Lawskills

Sundry Agricultural Land

There are many misunderstandings with regard to agricultural property relief (APR) for inheritance tax and lots of people think  the person who is claiming the APR has to be a farmer and there are many who consider they have to be a working farmer. However, for sundry elements of land this is not the case. It is simply that the land was used for agriculture by a third party and had been so for at le
ast the last 7 years.

It is quite normal in the course of probate and filling in the form IHT400 (Tax Return form on death for inheritance tax) for there to be some piece of sundry land held that could have arisen for a large number of different reasons. It could have been purchased with the house or it could be inherited from a family member who was very fond of this particular area and wanted a member to own the piece of land. It could be (rather like ‘The Good Life’) they think that there is some chance of retiring to a farming life, or indeed it could be more practically that a piece of land has been held with potential development value.

When any sundry land is found in the estate of a deceased person rigorous checks should be made to ensure that maximum reliefs are to be obtained for both APR and business property relief (BPR) if appropriate. Likewise anyone advising a living owner of such a sundry (but very valuable) ownership should consider putting in place criteria to try and ensure that either APR or BPR can actually be achieved. With development values having returned in the last year or two and the demand for housing being so high, it is imperative that tax planning is undertaken to try and protect the IHT reliefs where possible.

A recent capital gains tax case in Northern Ireland went before the Tribunal and business asset taper relief was denied on land that had been held, it was deemed, purely for pleasure with a few horses as an example. It is fair to say that once a horse ends up on a piece of land HMRC are trying to take the view that there is no business, it is either for pleasure or an investment: consider HMRC’s approach to income tax losses in, for example, Thorne and Murray and their very aggressive approach towards DIY liveries.

With sundry land it can be argued that letting out that land for a few horses is the easiest route. It can be deemed easier than keeping your own cattle with all the problems of passports and TB testing. It can be easier than running a fully serviced livery yard. However, many DIY yards have extensive responsibilities. Firstly, dealing with the very demanding owners. Secondly, making sure that the land is fertilised so that it grows a crop of grass and, thirdly, making sure that any horse that should fall ill while the owners are not there is handled with care and caution for their beloved animal, for example, calling the vet direct.

APR and BPR can be achieved on sundry land. An agricultural activity can take place through the letting to a local farmer where there is the genuine operation of breeding horses. BPR can be achieved if the land is genuinely used in a trade and there is good evidence of this. HMRC are very keen to deny any reliefs on redundant land and even genuine farmers who have to give up in the last couple of years through ill health can lose their APR. In these situations it is essential that where a farmer has farmed all his life that he does make sure (or his beneficiaries do make sure) that he enters into some form of farming arrangement with another local farmer. The next generation of farmers is coming into the industry and there is always someone keen to find extra land to graze sheep or cattle or take a crop or hay or silage from.

Practical Tip

Do not overlook sundry land that is currently held by a taxpayer or is in the estate of a taxpayer. Reliefs can be obtained and planning can be put in place.

Reproduced by kind permission of LawSkills Ltd from their website (  A site dedicated to helping Private Client Practitioners.

Disclaimer: LawSkills provides training for the legal industry and does not provide legal advice to members of the public. For help or guidance please seek the services of a qualified practitioner.


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