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Could my farm be Heritage Property?

Every farmer or estate landowner wants to be able to pass their farm or estate to the next generation without them being saddled with a large debt caused by Inheritance Tax. For most it is not a problem as Agricultural Property Relief (APR) or Business Property Relief (BPR) will apply.

However, sometimes you find out, often too late, that your farm or estate does not qualify. This may be because Diversification has meant you have lost the relief, or you have retired from farming but still own and live on the farm, or the Revenue has decided your farmhouse is too palatial (see leaflet “when is a farmhouse not a farmhouse”) In these cases it will be worth looking at whether you can claim Heritage protection.

What property qualifies?

Land that is of outstanding scenic or scientific interest
Any building where special precaution should be taken to ensure its preservation because of its outstanding historic or architectural heritage
Any area of land that is essential for the protection of the character and amenities of such a building
Any object historically associated with such a building
Pictures prints books and other publications (or collections) that have national scientific historic or artistic interest.

Who decides if my property qualifies?

The Accounting Standards Board. The legislation is contained in the Inheritance Tax Act 1984 S31(1) as amended by the Finance Act 1998.

What is the relief from tax?

It is very similar to woodlands relief. BPR and APR will usually give you 100% relief and therefore it is best to claim this if you can. But where that is not available and heritage relief does apply the relief is to defer the liability.

When the property is transferred the transfer is an exempt transfer to the extent of the heritage property. You have to submit a claim and unlike the woodlands relief it can apply on both lifetime transfers and transfers on death and transfers made by trustees.

Does having Heritage Property put any obligations on me?

Yes. You will have to undertake to maintain the land and buildings and ensure the repair and preservation of their character and also retain objects associated with the building. You will also have to allow reasonable access to allow the viewing of the heritage proerty by the public.

A claim for heritage property, particularly with the need to allow reasonable access to the public to view counts as diversifies activity. This can be integrated with other diversified activities such as tourism.

What if I break the undertakings?

The charge to IHT was only defers when you claimed the Heritage relief. Therefore if you break your obligations the charge crystallises based on the value of the property at that time and using the tax rate of the person who made the last conditionally exempt transfer.

Can I dispose of the Heritage Property?

Yes, but – at this time the exemption is reviewed. At the moment the status of “heritage property” must remain in force so that the disposal will not affect the status. The conditional exemption ceases and tax is charged on the sale proceeds or market value.

Should I claim APR/BPR or Heritage Property Relief?

If your property can claim APR or BPR this is by far the best relief to claim at it usually means 100% direct saving and not a deferral. But if APR or BPR do not apply it is worth looking at whether you can claim Heritage Relief.

If you would like additional information on Heritage Relief, please contact Jean Newton on 01905 721600 or via email


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