Agriculture: Inheritance Tax
The question
To ask the Chancellor of the Exchequer, how will property subject to tenancies agreed under (a) the Agricultural Holdings Act 1986 and (b) the Agricultural Tenancies Act 1995 be valued for the purposes of calculating an estate's inheritance tax liability.
Answered by Dan Tomlinson
The reforms to reliefs for agricultural and business property do not affect the existing rules on how assets are valued. The general rule for inheritance tax is that assets are valued at their ‘open market value’ at the date of death. If a property is subject to an agricultural tenancy, the open market value will reflect that fact. The value of the freehold interest subject to the tenancy may therefore be less than the vacant possession value. The valuation will consider factors including the type of agricultural tenancy, term length or security of tenure, property specific factors and the rent payable.
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