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In William Charnley & Maxwell Hodgkinson as Executors of the Estate of Thomas Gill (deceased) v HMRC [2019] TC7425 the First Tier Tribunal allowed claims to APR and BPR. It was a working farm so the house was a farmhouse and the business was not an investment business.

Agricultural Property Relief (APR) applies to the agricultural value of agricultural property:

APR covers farmhouses, as long as they are of a character appropriate to the property.

Business Property Relief (BPR) applies on the transfer of relevant business property. There is no BPR if the business is one of "wholly or mainly" in the making or holding of investments.

Mr Gill died owning Woodlands Farm which comprised:

He owned a further residential property which was let. He claimed the single farm payment.

The FTT allowed the appeal. The farmhouse and other buildings were occupied for the purposes of agriculture and the business was that of farming and not wholly or mainly of the holding of investments.

Comment:

HMRC dealt with each piece of property in isolation to determine whether it was used for agricultural purposes. The tribunal also looked at the whole property “in the round” taking a wide interpretation of “for the purposes of agriculture” and listening carefully to the witness accounts of the tenants under the grazing licences who were both very credible.

Links to our guides:

IHT Business Property Relief (subscriber guide)

IHT Agricultural Property Relief

External Link:

William Charnley & Maxwell Hodgkinson as Executors of the Estate of Thomas Gill (deceased) v HMRC [2019] TC7425