IHTM24060 - Agricultural purposes: Introduction

The phrases ‘agricultural purposes’ and ‘for the purposes of agriculture’ are interchangeable, and we use both phrases to mean the same thing in this guidance.. Whether property is occupied for the purposes of agriculture will depend on all the facts of the case.

To qualify for agricultural relief from inheritance tax property must be both

• agricultural property ( IHTM24030) and
• occupied for agricultural purposes.

It is important that both requirements are satisfied, as it is possible to have agricultural property, such as a farmhouse ( IHTM24036), that is not occupied for the purposes of agriculture, for example if the farmhouse is occupied by a retired farmer who has let the qualifying agricultural land to a tenant.

Because both conditions must be satisfied, you must consider land ( IHTM24031) farmhouses ( IHTM24036), farm cottages ( IHTM24034) and all other buildings ( IHTM24035) separately and be prepared to restrict agricultural relief where part of property is not used for agricultural purposes.

It is your responsibility to decide whether property is occupied for the purposes of agriculture ( IHTM24060), but close liaison with the DV on this aspect will be helpful.

In many cases business relief will be available as an alternative. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)