SVM112010 - IHT Agricultural Property Relief: Introduction

Main Requirements

The legislation governing Agricultural Relief (AR) is contained in sections. 115 to 124B (inclusive) IHTA 1984. AR is due to the extent that the value transferred by a transfer of value is attributable to the agricultural value of agricultural property.

With effect for deaths and other transfers from 6 April 2026 (and including transfers made within 7 years of a death on or after 6 April 2026 if they were made on or after 30 October 2024) the highest rate of relief (100%) will be available on the combined value of qualifying agricultural and/or business property up to £2.5 million, or up to £5m if unused allowance can be transferred from a pre-deceased spouse or civil partner. This will only be due on the chargeable value of relievable property and will not apply to exempt transfers of relievable property. Any value in respect of total relievable property which exceeds the allowance will qualify for relief at 50%. More details can be found at the beginning of IHTM25500.   

The relief is extended to shares or securities of a company if the following conditions are satisfied;

  • The shares or securities gave the transferor control of the company immediately before the transfer (see SVM112040).
  • The agricultural property formed part of the company's assets and part of the value of the shares or securities can be attributed to the agricultural value of that property (see SVM112050).
  • The company satisfied the occupation/ownership tests in relation to the agricultural property (see SVM112060 onwards).
  • The transferor satisfied the ownership requirement in relation to the shares or securities (see SVM112100).
  • The shares or securities were not subject to a binding contract for sale at the time of the transfer (see SVM112120).

All these conditions must be satisfied.

Lifetime Transfers

There are additional conditions which must be satisfied for the purposes of calculating

  • the value transferred by a potentially exempt transfer (PET) that becomes chargeable.
  • for all other chargeable transfers after 17 March 1986, the additional tax payable because of the transferor's death within seven years of the transfer.

Details of the conditions appear at SVM112140.

Relevant property trusts

From 22 March 2006, all settlements which are subject to ten yearly and exit charges should take references in the agricultural relief provisions to the "transferor" as references to the trustees of the settlement and references to "the transfer" as references to the occasion of charge.

Additional Guidance: SVM150000