What is Agricultural Property Relief?

What is Agricultural Property Relief?

Agricultural Property Relief (APR) is a tax relief under UK law allowing up to 100% relief on farming land, houses and cottages. The relief is in place to allow continuation of farming businesses after death or transfer without the need to sell the business to pay a 40% tax bill.

APR applies to most agricultural practices but is specific about the exclusions, so it is important to ensure that your farming land falls within the stringent requirements needed for APR to be given.

Examples of land that does attract APR include:

  1. Arable farming for human or animal consumption, including set aside land;

  2. Production of livestock for human consumption or use; and

  3. Land used for wildlife habitats under the Government Habitat Scheme.

Examples of land that does not attract APR include:

  1. Rearing of birds or fish for sport;

  2. Agricultural buildings that dominate the land in size (large barns on small holdings); and

  3. Paddocks for horse riding.

Dangers for APR

APR is complex, specific and judged on a case-by-case basis. Issues surrounding the specific wording of farming tenancies, the size, use, character and history of the farm and its ancillary buildings (including farmhouses and cottages) can mean that APR cannot be claimed, or can only be claimed to a lesser amount.

As APR can drastically alter the taxation of an estate, it is crucial for landowners to seek professional advice. Tax planning and understanding the specific requirements of APR are essential to ensure that families can continue their agricultural traditions without disruption from unexpected tax burdens.

Changes to APR

There are current discussions about changes to the APR regime, so it is also important to keep on top of any changes that are brought in and to meet with your advisor on a regular basis to ensure that APR is still available to you.

How can we help?

If you need assistance with your farming assets, contact Phoebe Skarlatos on 0116 212 1055 or at pskarlatos@lawson-west.co.uk

Contact Us 

View all