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Agricultural Property Relief (APR)

At The McKinstry Company, we are agricultural specialists. Working as we do across Ayrshire, many of our clients operate farming businesses and live in rural communities. While Agricultural Law is complex, our expert team can provide clear and practical advice tailored to your family and business. We work with clients from tenant farmers to major landowners to provide a comprehensive legal service.

One of the most complicated areas of Agricultural Law is the tax law that applies to agricultural property and land. Here we provide an overview of agricultural property relief (APR) which is a type of tax relief that applies in inheritance tax law. However, if you have any questions about APR, you should contact a member of our team who can advise you in full. We are happy to help.

What is agricultural property relief (APR)?

Under inheritance tax law, APR applies to agricultural property. If applicable, it will mean that agricultural property can be passed on to the next generation without attracting inheritance tax.

APR applies only to agricultural property. “Agricultural property” is defined in The Inheritance Tax Act 1984 as:

“agricultural land or pasture and includes woodland and any building used in connection with the intensive rearing of livestock or fish if the woodland or building is occupied with agricultural land or pasture and the occupation is ancillary to that of the agricultural land or pasture; and also includes such cottages, farm buildings and farmhouses, together with the land occupied with them, as are of a character appropriate to the property.”

This definition may seem confusing but, in essence, it covers land that is used to grow crops or rear animals. It may also include farm buildings and cottages. However, certain items are not included, such as farm equipment, derelict buildings or harvested crops and livestock.

What rules apply to the relief?

It is important to note that the relief only applies to the agricultural value of the property. This means that it is only the value for agricultural purposes that attracts the relief and this may not be the same as the market value.

It is crucial that the property has been owned and occupied for agricultural purposes immediately before its transfer for two years if occupied by the owner, a company controlled by them, or their spouse or civil partner. It must have been owned and occupied immediately before transfer for seven years if occupied by someone else.

There are also important rules applying to any farmhouse or cottage for them to be included in the relief.  Buildings must be of a nature and size appropriate to the farming activity that is taking place – and, as outlined above, the property is valued only in terms of its agricultural value. Any additional value will not attract APR.

What are the APR rates?

APR will generally be 100%, for example where the person who owned the land farmed it themselves.  However, in some cases the relief will be 50%. It is important you speak to a solicitor who can establish the particular circumstances relevant to your agricultural property.

Contact our Agricultural Lawyers in Ayrshire, Scotland

If you want to discuss APR, or any other Agricultural Law issue, further, get in touch today. You can contact us on 01292 281711 or via our online contact form. Our friendly and dedicated team are here to help you.

Debbie Dunlop Partner View Debbie's Profile

Based in our Girvan office, Debbie is a Partner who is highly experienced in Private Client work, particularly in the agricultural and farming sectors. She used to enjoy travelling the world, but now married to a farmer, she spends her weekends in wellies, feeding cattle or on the back of a quad bike. Debbie is also a member of the Agricultural Law Association.

Having lived in Rome for a number of years, Debbie also studied Law at the Université d’Auvergne in Clermont-Ferrand – as a result, she is fluent in both Italian and French. She can also speak a bit of Spanish, thanks to travelling around various Central and South American countries, including walking the Inca trail. She has managed to convince her husband that the cattle in Argentina will be worth a look at some time soon!

A keen runner, Debbie has competed in 10Ks and half marathons, even completing the Rome Marathon. This now comes in handy during lambing time chasing after ewes.

Ayr Sandgate

Queen’s Court House
39 Sandgate
Ayr, Ayrshire
KA7 1BE

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Girvan

146-148 Dalrymple Street
Girvan, Ayrshire
KA26 9BQ

  • Disability access
  • Parking close by
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