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The value elements of agricultural property

Agricultural Property Relief is limited to the agricultural value of agricultural property. The market value of the property may exceed the agricultural value.

The definition of agricultural property as given by the legislation is explained in more detail in the HMRC Inheritance tax manual at IHTM24030 and subsequent pages. Agricultural property is:

1. •

   agricultural land or pasture (IHTM24031)

2. •

   woodland (IHTM24032) and any building used in connection with the intensive rearing of livestock or fish (IHTM24033) if the woodland or building is occupied with agricultural land or pasture, and the occupation is ancillary to that of the agricultural land or pasture

3. •

   cottages (IHTM24034), farm buildings (IHTM24035) and farmhouses (IHTM24036) together with the land occupied with them, as are of a character appropriate (IHTM24050) to the agricultural land or pasture

IHTA 1984, s 115(3)

Agricultural value is defined as, ‘The value which would be the value of the property if the property was subject to a perpetual covenant prohibiting its use otherwise than as agricultural property.’