Back
Get in Touch Menu

Land and farming partnership agreements

20 October 2015

Business property relief (BPR) is valuable for inheritance tax (IHT) purposes as it has the ability to reduce the value of assets to nil.

Therefore, BPR should be considered when aiming to reduce IHT as it can render assets totally exempt from IHT.

Farmland generally qualifies for 100% relief based on the agricultural value of the land; anything above agricultural value will not be covered.

For IHT relief it is often beneficial for land which is owned personally, but used in a farming partnership, to be included in the partnership. This can ensure that rather than the asset qualifying for 50% BPR when held outside of the partnership, it qualifies for 100% BPR.

Let buildings will not attract BPR if held outside the partnership. If held within the partnership 100% BPR may be available, assuming that the partnership is engaged wholly or mainly in trading.

In addition it is essential to have a well-drafted partnership agreement, as this will illustrate which assets are partnership assets that should qualify for 100% BPR. It should also clarify how the land is owned and confirm how and when each partner, that introduces land into the partnership, can withdraw it.

We're here to help
Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Contact
Adam Hale BA (Hons), TEP, FALA
Partner
Adam Hale
View profile
Related services
Share this article
Resources to help

Related articles

Registering your land or property: better late than never!

Agriculture, land & development

If your land falls into the 14% that is currently unregistered across England & Wales, now is the time to act. Our agriculture, land & development team discuss the importance…

Sophie Oakes LLB (Hons)
Solicitor

The Cotswolds Visual Impact Provision (VIP) Project

Agriculture, land & development

National Grid’s Visual Impact Provision (VIP) project, which aims to enhance the Cotswolds National Landscape by reducing the visual impact of overhead powerlines along the Cotswold Way, has moved a…

Adam Hale BA (Hons), TEP, FALA
Partner

When landowners become land-defenders: how to protect your land from new public rights of way

Agriculture, land & development

How can you protect your land from the implementation of new public rights of way? Our agriculture, land & development expert explains what landowners should do. A public right of…

Sophie Oakes LLB (Hons)
Solicitor
Contact us