ExpertMedium2 marksMultiple Choice
ACCA · Question 21 · Inheritance tax
Section B - Case 2: Bramble Farms
Arthur owns Bramble Farms, a working agricultural estate. He decides to gift the entire estate to his daughter, Beatrice, during his lifetime. The estate includes agricultural land, a farmhouse occupied by Arthur, and various farm machinery.
For Inheritance Tax (IHT) purposes, what condition must the farmhouse meet to qualify for Agricultural Property Relief (APR)?
Section B - Case 2: Bramble Farms
Arthur owns Bramble Farms, a working agricultural estate. He decides to gift the entire estate to his daughter, Beatrice, during his lifetime. The estate includes agricultural land, a farmhouse occupied by Arthur, and various farm machinery.
For Inheritance Tax (IHT) purposes, what condition must the farmhouse meet to qualify for Agricultural Property Relief (APR)?
Answer options:
A.
It must be used exclusively for business meetings.
B.
It must be of a character appropriate to the agricultural land.
C.
It must have been owned for at least 5 years.
D.
It automatically qualifies if located on the farm.
How to approach this question
Recall the specific IHT rules for farmhouses. They must be 'of a character appropriate' to the land being farmed.
Full Answer
B.It must be of a character appropriate to the agricultural land.✓ Correct
For a farmhouse to qualify for Agricultural Property Relief (APR) for IHT, it must be 'of a character appropriate' to the agricultural land. This means the size, value, and nature of the farmhouse must be proportionate to the farming activities taking place on the associated land.
Common mistakes
Assuming any house located on farmland automatically qualifies for APR.
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