HMRC loses court case over inheritance tax
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22 July 2013
Her Majesty’s Revenue and Customs (HMRC) has lost its bid to charge
inheritance tax on farmhouses where the farmland and farmhouse are not
owned by the same person.
After a long-running court case, the Upper Tax Tribunal decided that
agricultural property relief from inheritance tax on farmhouses is
still allowable where the farmhouse and farmland is not owned by the
same person – but is occupied by the same person.
The case in question relates to the Hanson family. While Mr Hanson
senior owned the farmhouse for IHT purposes, his son was actually
living in the property and also farming the 215 acres of land. Of the
215 acres, 128 were owned by the son with just 25 acres owned directly
by the father, with the rest either rented or owned by other parties.
On the death of Mr Hanson senior, HMRC accepted that the farmhouse was
occupied for agricultural purposes, but did not accept that it was “of
a character appropriate to the amount of land owned by the deceased and
farmed by his son” as IHT is charged solely on the deceased's estate.
However, the Upper Tier Tribunal said that HMRC must take into account
the entire area farmed by the son and that ‘common occupation’
therefore applied. The decision is seen as welcome for
farming families who will now be able to apply for
agricultural property relief where ownership of property and land is
If you’d like advice on Inheritance Tax and future planning
please contact Alistair Dobson at Lawson-West on 01858 445 480.
About the Author
Lawson-West specialise in commercial, business and employment law. Our team
of dedicated commercial solicitors can help with buying or selling a business,
business law and disputes, landlord and tenant issues and commercial property.
Our expert employment team can offer practical advice and guidance on all
aspects of employment law including redundancy, compromise agreements and
dismissal procedures. Visit
www.lawson-west.co.uk for more information.
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Article Published/Sorted/Amended on Scopulus 2013-08-13 14:33:06 in Tax Articles
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