Member Article

Yorkshire landowners to benefit from new ruling

Following a recent overruling by The Upper Tribunal, landowners in the Yorkshire region will be able to benefit from agricultural property relief (APR) more easily where the ownership and occupation of farmland has been split across family members and trusts.

A number of factors apply when determining whether agricultural property is of ‘appropriate character’ to apply for ARP, including having a physical connection between the property and the land.

However following the recent decision by the Court, APR can now be used to reduce the tax burden on property that doesn’t form part of a larger estate.

The decision results from a case in Milton Keynes where 25 acres of farmland was left in a will along with a farmhouse in a life interest trust.

Despite family members living in the farmhouse and farming the land, HMRC argued that APR wasn’t available on the transfer of the farmhouse on death.

This is because they felt 25 acres did not reflect enough land to give associated buildings the appropriate farming character.

The Court however ruled that APR can be used to reduce the tax burden on agricultural property and to qualify for relief properties don’t need to form part of a larger estate which would be charged inheritance tax at the same time.

Commenting on the case, Katherine Bullock, PwC’s national head of private client tax and Leeds partner, said: “This is great news for landowners in the region. Despite the recession, farmland values have risen 22% over the last few years with land seen as one of the best performing assets to have.

“Being able to access APR more easily therefore makes a significant difference to the numerous landowners in Yorkshire and they should now look closely to understand what this ruling means for them.

“To help them do this the Court has outlined a wide number of other owner/occupier splits which they feel should attract APR.”

This was posted in Bdaily's Members' News section by Mark Lane .