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Farm tenancies

05 November 2013
Issue: 4427 / Categories: Forum & Feedback , Inheritance Tax

A client owns some farmland, but this  is subject to an Agricultural Holdings Act tenancy and consequently will attract only 50% agricultural property relief against inheritance tax

My client owns farmland together with a farm house that is let out under an old-style Agricultural Holdings Act tenancy. The tenants are the second generation and thus there is potentially one further succession on the tenancy.

The land and property subject to this tenancy will only attract 50% inheritance tax agricultural property relief and we are looking at how to improve the position.

We can look to convert the existing tenancy into a new farm business tenancy which would then potentially qualify the land and property for 100% agricultural property relief. I am aware that there are direct tax stamp duty land tax and potentially VAT issues to be considered and various reliefs may be available but I am struggling to find any detailed information on this subject.

Can readers provide possible tax-efficient solution and highlight any potential pitfalls in this case? If they...

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