Inheritance tax: extension of agricultural and woodlands reliefs
The measure
In January 2009 the European Commission made a formal request to the UK for it to amend current inheritance tax ('IHT') legislation and extend the relief available for APR to property outside the UK, the Channel Islands and the Isle of Man. In response to this, it was announced that with immediate effect IHT agricultural property relief will be extended to include property in the European Economic Area ('EEA').
The scope of a number of related IHT reliefs for woodlands has also been extended in a similar way. In a surprise move, hold over relief for capital gains tax purposes has also been extended to include agricultural property, farmed by someone other than the owner, in a qualifying EEA state. Claims can be made retrospectively where the relevant statute of limitation allows.
Who will be affected?
Executors and personal representatives of those who have died, as well as individuals and trustees who hold qualifying agricultural property in the European Economic Area..
When?
The extension to the rules will take effect from 22 April 2009. However, tax due or paid after 23 April 2003 in relation to agricultural property located within the EEA will qualify for refund.
The extension to the rules was instigated by the European Commission and will be beneficial for those individuals who have qualifying agricultural property in Europe. It is to be welcomed that there is the scope to claim back tax that has been previously paid.
