In the Trustees of Nelson Dance Family Settlement v HMRC [2009] EWHC 71 (Ch) a transfer of land by a sole trader qualified for IHT business property relief: on the loss to donor principle the transfer reduced the value of the business even though the land itself would otherwise only attract agricultural property relief.

  • A farmer transferred farm land and two cottages into a family settlement. This amounted to a transfer of value for IHT purposes.
  • The land had a high development value.
  • The trustees claimed that the gift qualified for 100% IHT business property relief (BPR).
  • HMRC denied relief on that basis that land and cottages twere not qualifying assets for BPR: they were neither a business or an interest in a business.
  • It was agreed that Mr Dance’s farming business was business property

The High Court found that the IHT value of his estate was reduced by the transfer and therefore on the loss to donor principle, the transfer of value amounted to a transfer of relevant business property.


If the qualifying conditions are met, agricultural land will qualify for IHT relief as agricultural property. The value of agricultural land is lower than land with development potential. If land has high development value it is more advantageous, if possible to claim business property relief on that land.


Agricultural Property Relief and Land

External Links:

Trustees of Nelson Dance Settlement V HMRC (2009) EWHC 71 (CH)