Legal definition of agricultural land for inheritence purposes

[L P]

Hypothetically of course, without going into detail, another family executor is arguing against the old man's will.
Over a few years the old man and I have somewhat unlawfully diversified on some farm buildings, I'm aware agricultural buildings class as agricultural land, but these ones have had tenants in for a few years but not ten to get certificates of lawful useage on the 10 year rule... Long and short, without any PP, do they still classify as agricultural? I'd assume the answer is yes, as if enforcement was issued they would have to revert back to their agricultural usage? Anyone been in this situation with sound advice? @George from SJM Planning maybe?

 

[George from SJM Planning]

Hypothetically of course, without going into detail, another family executor is arguing against the old man's will.
Over a few years the old man and I have somewhat unlawfully diversified on some farm buildings, I'm aware agricultural buildings class as agricultural land, but these ones have had tenants in for a few years but not ten to get certificates of lawful useage on the 10 year rule... Long and short, without any PP, do they still classify as agricultural? I'd assume the answer is yes, as if enforcement was issued they would have to revert back to their agricultural usage? Anyone been in this situation with sound advice? @George from SJM Planning maybe?

You are correct, lawfully they are agricultural buildings that are currently being used unlawfully for other uses.

 

[L P]

You are correct, lawfully they are agricultural buildings that are currently being used unlawfully for other uses.

Many thanks George

 

[renewablejohn]

You are correct, lawfully they are agricultural buildings that are currently being used unlawfully for other uses.

I would be worried with this because if you take the unlawful use away would they then be classed as derelict buildings and as such are not deemed part of the agricultural land.

 

[George from SJM Planning]

I would be worried with this because if you take the unlawful use away would they then be classed as derelict buildings and as such are not deemed part of the agricultural land.

If they return to agricultural use then they won't be derelict. In planning terms dereliction needs a significant time of lack of use or disrepair. Just being empty for a bit won't trigger dereliction.

 

[renewablejohn]

If they return to agricultural use then they won't be derelict. In planning terms dereliction needs a significant time of lack of use or disrepair. Just being empty for a bit won't trigger dereliction.

Unfortunately where not talking planning terms but HMRC. If the unlawful tenants are not ag related then I can see these properties being excluded from relief. I know it sounds harsh but HMRC have got form for doing this.
I would look to an agri specialist tax expert pronto.

 

[L P]

Unfortunately where not talking planning terms but HMRC. If the unlawful tenants are not ag related then I can see these properties being excluded from relief. I know it sounds harsh but HMRC have got form for doing this.
I would look to an agri specialist tax expert pronto.

They won't get APR as it looks atm.

 

[renewablejohn]

They won't get APR as it looks atm.

Would still recommend getting an agri tax expert to have a look as the Balfour case set some important principles when looking at a diverse estate especially if you can prove the old man had a finger in every pie.

 

[Still Farming]

Whose rocking the boat?
Surely APR or BPR kick in whatever?
Do you rent sheds out or your businesses??

 

[L P]

Would still recommend getting an agri tax expert to have a look as the Balfour case set some important principles when looking at a diverse estate especially if you can prove the old man had a finger in every pie.

Thank you, worth a look

 

[L P]

Whose rocking the boat?
Surely APR or BPR kick in whatever?
Do you rent sheds out or your businesses??

Siblings in for their pound of flesh despite having nothing to do with the farm their entire life... you know how it goes. Rented out

 

[Regenerator1]

Hypothetically of course, without going into detail, another family executor is arguing against the old man's will.
Over a few years the old man and I have somewhat unlawfully diversified on some farm buildings, I'm aware agricultural buildings class as agricultural land, but these ones have had tenants in for a few years but not ten to get certificates of lawful useage on the 10 year rule... Long and short, without any PP, do they still classify as agricultural? I'd assume the answer is yes, as if enforcement was issued they would have to revert back to their agricultural usage? Anyone been in this situation with sound advice? @George from SJM Planning maybe?

Parking a beech baron twin piston aircraft in your barn is not farming I scrapped my barn which held a gazelle for that reason alone... jockeys can catch the bus between race meetings?

 

[Regenerator1]

Siblings in for their pound of flesh despite having nothing to do with the farm their entire life... you know how it goes. Rented out

Siblings will always get their cut of the meat...

 

[L P]

Parking a beech baron twin piston aircraft in your barn is not farming I scrapped my barn which held a gazelle for that reason alone... jockeys can catch the bus between race meetings?

That bit has planning and is fortunately mine.... no Baron, however I did have a delivery driver ask if he could go and see the jet in the field today... I was a bit puzzled until he showed me our new Google satellite image... what are the chances?!

 

[L P]

Siblings will always get their cut of the meat...

It's not their cut, they are getting that anyway

 

[essexpete]

Whose rocking the boat?
Surely APR or BPR kick in whatever?
Do you rent sheds out or your businesses??

I don't think let buildings qualify for either APR or BPR. I think an HMRC inspector will potentially give a hard time to an estate in this situation. As someone has said above, some proper tax advice required.

 

[Still Farming]

I don't think let buildings qualify for either APR or BPR. I think an HMRC inspector will potentially give a hard time to an estate in this situation. As someone has said above, some proper tax advice required.

It's a business, is it not??
Cash job otherwise is it??

 

[essexpete]

It's a business, is it not??
Cash job otherwise is it??

With my limited experience/knowledge it is possible that the lettings will be viewed by HMRC as investment income. I am not suggesting that the OP takes my word, but should seek professional tax advice.
HMRC can, if they choose, go through an estate with a fine comb.

 

[farmerm]

It's a business, is it not??
Cash job otherwise is it??

I don't think so. HMRC generally consider letting to be a passive investment not a business do they not? Might be ok if the rental income is a small modest sum relative to the overall business turnover.

I fear this could end up costing more in IHT liability than was ever generated from letting in the first place.....

Definitely needs specialist advice on this one.

 

[L P]

I don't think so. HMRC generally consider letting to be a passive investment not a business do they not? Might be ok if the rental income is a small modest sum relative to the overall business turnover.

I fear this could end up costing more in IHT liability than was ever generated from letting in the first place.....

Definitely needs specialist advice on this one.

Through the books but under 10% of the farm income. As I understand it from workings, there would be no APR on the buildings and probably no bpr, but not definitely, so there is likely a healthy iht bill attached to the buildings... however thats not the issue, the issue is that family have taken a shine to the idea of inheriting the most valuable bits despite never having been promised or offered any of it, it's not willed to them, they were always part of the farm, built by the farm, paid for by the farm and run by the farm (he and I) and that was the old boys intentions to keep them as part of the farm. I've generously been offered some buildings with wishes to cancel out tenancies, exchange for land, other buildings which have huge marriage value/financial value, exceeding the entire value of the yard by 4x or more and leaving me holding the baby for all the iht bill associated with the yard. Looking at it that way, if they are to pick off £500-700k in value as a land grab and leave me with a £80k tax bill to boot, it's better value to go to court over.