Agricultural Property
At the end of January 2009, the European Commission formally requested the UK to amend its discriminatory Inheritance Tax (IHT) legislation relating to Agricultural Property, as historically, the UK only granted Agricultural Property Relief (APR) or Woodlands Relief (WR) on qualifying property in the UK. Legislation will be introduced in the Finance Bill 2009 to extend the relief to all qualifying property in the European Economic Area (EEA).
This legislation is retrospective, in that IHT due or paid on or after 23 April 2003 in respect of a charge on death or on property held in trust will be eligible for the relief. The earliest deadline for reclaiming overpayments will be 21 April 2010, whilst the ordinary limits for reclaiming overpayments (which are being reduced from six years to four), will not apply to claims made before 1 April 2011.
For deaths before 22 April 2009, WR can be claimed on property in the EEA, but the time limit for making a claim is usually two years from date of death. The earliest deadline for reclaiming overpayments will be 21 April 2010.
Agricultural Property situated in another EEA state which is farmed by someone other than the owner qualifies for this relief, and will now also qualify for Capital Gains Tax (CGT) Holdover Relief. This postpones the charge to CGT until the asset is disposed of by the recipient. The time limit for claims is reducing to four years from 1 April 2010, so claims relating to the 2003/04 tax year need to be made by 31 January 2010, and claims for 2004/05 and 2005/06 will need to be made by 1 April 2010.
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