IHTM24091 - Occupation of
farmhouses, cottages and farm buildings: Farmhouses
A farmhouse was defined in
Rosser v IRC [2003] WTLR 1057 by the Special
Commissioner as ’a
dwelling for the farmer from which the farm is
managed.’ Unless farming operations or management
activities were conducted at the property it cannot be a farmhouse.
The typical problem case is one in which the deceased had
formerly been a working farmer, either on theirs own account or as
a member of a partnership, had retired and continued to live in the
former farmhouse. They may also have retained some nominal farming
activity. The bulk of the farmland may have been given to the
family, sold or let. In such circumstances you may be able to
conclude that at the date of death the house is neither
agricultural property nor occupied for the purposes of agriculture.
This is the situation in Rosser referred to above.
You should deal with a deduction for agricultural relief
against the deceased’s residence on the grounds that it is a
qualifying farmhouse as follows
- If the deceased/transferor owned farmland
and let it under a grazing licence and it is not clear to what
extent the land was occupied for agricultural purposes (
IHTM24061), you should obtain a copy of
the licence or, if it was oral, a statement of its full terms. Land
let on a grazing or mowing licence for less than one year at a time
will not affect the deceased’s occupation (
IHTM24071) of the land. If the deceased
had no, or insufficient, obligations in respect of the land, all
these being placed upon the tenant, the occupation of the farmhouse
will not have been for agricultural purposes.
- You should be aware that in recent years
grazing lets are more likely to be through a farm business tenancy.
(
IHTM24240) This may exclude the
landlord from occupation of the let land, because instead of being
for the grazing period, Spring to Autumn, the farm business tenancy
may be for the entire year.
- if all the land owned by the deceased is
let out to a tenant farmer under an Agricultural Holdings Act (
IHTM24220) tenancy or a farm business
tenancy (
IHTM24240) then the deceased will not
normally be considered to be in occupation of the land for
agricultural purposes and therefore will not be in occupation of
the farmhouse for agricultural purposes either
