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Woodlands may attract one of three different types of relief from inheritance tax (IHT) depending on the nature of the land and timber operations. These are:

1. •

   agricultural property relief (APR) covered in the Agricultural property relief (APR) guidance note

2. •

   business property relief (BPR) covered in the BPR overview guidance note

3. •

   or woodlands relief

This note concentrates on woodlands relief but APR and BPR are also considered briefly below.

Woodlands may obtain APR if they are occupied with agricultural land or pasture and their occupation is ancillary to that of the agricultural land or pasture. An example is a strip of woodland acting as a wind shelter for farmland.

Alternatively, woodlands may qualify for BPR if they are run as a commercial business (eg orchards or nurseries) or otherwise generate business profits by regularly producing timber.

APR and BPR are usually to be preferred to woodlands relief. This is because, effectively, APR and BPR provide the equivalent of an exemption from IHT (at 50% or 100% of the