Estate Planning

Agricultural Property Relief (APR)

APR is a tax relief available in the UK that reduces the amount of Inheritance Tax (IHT) payable on agricultural property. This relief is designed to support the continuation of farming enterprises and to prevent the fragmentation of agricultural land upon the death of a property owner.

Key Features of Agricultural Property Relief (APR):

Eligibility:

• Property: The relief applies to agricultural land and buildings, including farmhouses and cottages that are part of the agricultural business.
• Use: The property must be used for agricultural purposes, such as growing crops or raising livestock.
• Ownership: The property must be owned by the person claiming the relief, and it should be used in an agricultural trade or business.

Relief Rates:

• 100% Relief: Agricultural land and buildings used for farming typically qualify for 100% relief from Inheritance Tax.
• 50% Relief: If the property includes a farmhouse or residential buildings that are not essential to the farming business, these may only qualify for 50% relief.

Conditions:

• Farming Use: The property must have been used for farming purposes for at least two years before the owner’s death.
• Active Use: The property must be actively used in the farming business and not merely held as an investment.

Exclusions:

• Non-Agricultural Use: Property that is not used for farming, such as investment properties or land with no active farming use, does not qualify for APR.
• Diversified Activities: If the agricultural property is used for non-agricultural purposes (e.g., as a holiday let or for commercial activities unrelated to farming), it may not qualify for APR.