Planning laws and IHT for farmers
Under the new planning rules, where the necessary conditions are met, it appears farm buildings may be converted into up to three residential dwellings without obtaining the normal planning permission. This relaxation of the rules should make developments easier and is likely to increase the overall value of some farms. However, for inheritance tax purposes agricultural property relief should provide up to 100% relief for qualifying farm assets such as land, farm buildings, etc. but only for the ‘agricultural value’ of land. That means that any value attributable to development potential will not benefit from inheritance tax relief, unless the conditions for business property relief are also met.
As well as considering the agricultural value as compared to the market value of land, land-owners should carefully review the availability of reliefs and consider whether any actions should be taken now to improve the position
Date: 2nd July, 2014
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