For a farmhouse to obtain the benefit of agricultural property tax relief ('APR') to mitigate the payment of inheritance tax, it must - amongst other considerations -  be occupied for the purposes of agriculture up to the date of death of the farmer concerned. Numerous cases have been tried in establishing the circumstances to which such 'occupation' applies, leading to some arguably unjust outcomes, as HMRC seeks to maximise their tax intake. 

However, a recent case looks to assist farming families, so that where a farmer has ceased actual farming activities due to old age or ill health, taking all considerations into account, they have not necessarily ceased to be a farmer for the purposes of occupying a farmhouse at the date of death.

The case goes some way to helping farming families obtain APR on a major asset. Whether HMRC will appeal the decision remains to be seen. The case also serves to highlight the need to ensure that a grazing licence granted is fit for purpose to meet stringent HMRC guidelines, not least ensuring that the landowner retains control of their land.

Should you have a query regarding your own family position, please contact us.