Agricultural relief on ATA tenancy land

[Cowski]

Does anyone know if land, farmhouse and agricultural buildings let on an ATA tenancy (eg a new FBT) qualify for 100% inheritance tax relief? The HMRC online guidance seems extremely vague on a topic I would have thought should be clear cut and simple.

 

[dinderleat]

ATA ? When did you sign it/ set it up all if it's a new tenancy I should get the tax relief

 

[Cowski]

ATA ? When did you sign it/ set it up all if it's a new tenancy I should get the tax relief

I should have said Agricultural Tenancies Act '95 so an FBT, this would be for a new FBT.

I'm trying to understand the tax benefit of a contract farming agreement to a land owner over an FBT as I was under the impression that land and farmhouse let on an FBT would have inheritance tax at 50% whereas a CFA would give 100%relief on land and house.

 

[dinderleat]

Spoke to a land agent he said both qualify for 100% tax relief, but if it was an AHA it wouldn't qualify for the full 100%

 

[Goweresque]

As long as you have owned the land for 7+ years at the point of death then land let on FBT qualifies for 100% Agricultural Property relief:

https://www.gov.uk/guidance/agricultural-relief-on-inheritance-tax

 

[Still Farming]

Spoke to a land agent he said both qualify for 100% tax relief, but if it was an AHA it wouldn't qualify for the full 100%

But if you only rent it -it's not your land to claim any relief.

 

[Cowski]

Thanks for the replies

 

[dinderleat]

But if you only rent it -it's not your land to claim any relief.

Obvisily if you own the land you can't sell it triggering the relief.

 

[chipchap]

Spoke to a land agent he said both qualify for 100% tax relief, but if it was an AHA it wouldn't qualify for the full 100%

Not always so.
As I understand it my landlord will get 100% relief on the farm I rent under 1986 AHA. This is because my tenancy is dated post 1995, as it is a first succession.
There is a huge advantage to a landowner granting a succession under the 1986 act, as the agricultural relief will jump from 50% to 100%.

 

[Billboy1]

Not always so.
As I understand it my landlord will get 100% relief on the farm I rent under 1986 AHA. This is because my tenancy is dated post 1995, as it is a first succession.
There is a huge advantage to a landowner granting a succession under the 1986 act, as the agricultural relief will jump from 50% to 100%.

Interesting

 

[chipchap]

Interesting

Most tenants do not realise what cards they have in their hand when negotiating.

 

[dinderleat]

Best thing is to always get advice, either from TFA or a good reputable land agent (they are rare mind )

 

[chipchap]

As long as you have owned the land for 7+ years at the point of death then land let on FBT qualifies for 100% Agricultural Property relief:

https://www.gov.uk/guidance/agricultural-relief-on-inheritance-tax

Also land farmed in hand must have been owned for two years before agricultural property relief can be claimed.

 

[soilbug]

Is it not the case that AHA 1986 tenancies may be inherited by up to two more generations of close relatives (subject to qualifying criteria) whilst Farm Business Tenancies under the 1995 Act have no such rights unless such a clause is volunteered for addition in the tenancy agreement by the landlord (which I have never known happen so far)?
soilbug

 

[chipchap]

Is it not the case that AHA 1986 tenancies may be inherited by up to two more generations of close relatives (subject to qualifying criteria) whilst Farm Business Tenancies under the 1995 Act have no such rights unless such a clause is volunteered for addition in the tenancy agreement by the landlord (which I have never known happen so far)
soilbug

Yes, that's about the gist of it