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Inheritance Tax And The Family Farm

On death  Inheritance tax is levied at 40% on that part of the value of the estate which exceeds £325,000.  It is the market value of assets which is relevant.  It is a common misconception that Inheritance tax is a problem only for the wealthy, but in today's climate when agricultural land and buildings often fetch a price on the open market far exceeding agricultural value many farming families who own any part of the land they farm have a potential Inheritance Tax problem.

There is a relief against Inheritance tax known as agricultural property relief but its availability its frequently misunderstood.

Although undoubtedly the intention of the legislation was to protect the integrity of farming businesses so that the next generation were not forced to sell up on a death to pay tax, you only get the tax relief if you satisfy all the detailed conditions in the legislation.  It is very easy for a genuine farming business to miss out on Inheritance tax relief because a condition has not been satisfied.

We do advise those involved in the farming industry to regularly review their affairs to ensure that their business is structured so as to take full advantage of the relief.

 If there are proposals to change the way the business is run, to raise further capital or to diversify out of agriculture, we would urge you to check before implementing any changes whether this will have any impact upon the availability of agricultural property relief.

 We can assist with this and advise on the availability of the associated relief known as business property relief.

For further information about Inheritance Tax and family farms contact a member of our Wills and Succession Planning Team.

Furley Page Solicitors in Kent, London, Canterbury, Chatham & Whitstable
Get in touch on 0845 603 10 57