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  • Overview

    Probate advice for farm and land owners

    Combining sensitivity with a practical and straight forward approach, our expert probate lawyers have particular experience in administering large landed and farming estates and in dealing with the unique complexities of such estates.

    We understand what it means to lose someone and that each estate is unique, which is why we offer a bespoke service, delivering support tailored to your individual needs.  Our team’s expert probate advice has delivered peace of mind to generations of executors, helping them to understand and navigate the estate administration process and achieve tax efficient succession.  

    If you are dealing with the estate of a landowner or farmer it is important to assess the intricacy of the estate and the type of support you need.  Farmland and other agricultural assets, even possibly the farmhouse, may qualify for agricultural property relief.   Our team can offer expert probate advice to help you understand and navigate the process of administering an agricultural estate and claiming the relevant reliefs.  By working closely with our Tax Planning, Trusts, Residential Conveyancing, Agricultural and Owner Managed Business teams, we have the depth and breadth of experience to advise on every aspect of probate and beyond to obtain the best result for the family. 

    What is agricultural property relief?

    Agricultural property relief is a relief that is allowed to reduce the value of an estate which is subject to Inheritance Tax where the land and buildings qualify as agricultural property.  The relief applies to property in the UK, the Channel Islands, the Isle of Man and the European Economic Area.

    The relief is available where the deceased was a sole trader or a partner in a farming partnership.  Relief may also be available for the deceased’s shareholding in a farming company.  However, care needs to be taken to identify who actually owns the land and who is in occupation.  Thought also has to be given to other potential assets owned by the business.

    How do you qualify for agricultural property relief?

    In order to qualify for the relief, there must be agricultural land or pasture which is occupied for agricultural purposes.  Agricultural purposes is not defined but is generally understood to be for food production.  Where there is qualifying land, the relief can extend to the woodlands and buildings that are associated with and ancillary to the farmland.

    In order to qualify for the relief, the buildings must be of a “character appropriate” to the land.

    The land will need to be owned for at least two years to qualify for the relief.  If the land is owned but occupied by someone other than the owner for agricultural purposes then the land will need to be owned for seven years.

    Do you pay tax on farmland?

    If the land is used for agricultural purposes and has been owned for the required period of time then the agricultural value of the land is relieved from Inheritance Tax.  However, the market value of the farmland can be different, sometimes significantly such as where there is development potential, to the agricultural value which is relievable.  In these circumstances it may be possible to instead apply business property relief to the difference in value and so avoid Inheritance Tax on the full market value of the farmland.

    Does a farmhouse qualify for agriculture property relief?

    A farmhouse may qualify for relief provided it is of a character appropriate and is occupied by a farmer together with the adjoining farmland.  This will be very fact specific as the extent of land farmed, the size of the farmhouse, the time spent farming and the locality of the farm will all be factors, alongside others, in considering if a farmhouse will qualify for relief.  If the house does qualify for relief it will only be able to attract relief on the agricultural value of the house and not the full market value.

    What about farm cottages?

    It is possible to claim agricultural property relief on a farm cottage but it will depend on how the cottage is occupied, for example by a farm worker.  If the cottage is no longer connected to other agricultural activities on the farm, such as where the cottage has been let on an assured shorthold tenancy, it may still attract business property relief if taken with a number of factors the cottage only forms a small part of the overall farm business.

    What if not all the assets of the farming business are used for agricultural purposes?

    In many farm businesses diversification has taken place over a number of years in order to increase the profitability and income streams for the farm owner.  This diversification may affect the availability of agricultural property relief on the business as a whole.  However, in some cases business property relief may be applied instead.

    How do you value a farm?

    In order to value the farm all aspects need to be considered, such as the land, the buildings and houses, and also the machinery, crops and livestock.  If the land is farmed through a partnership or limited company then the partnership interest or shareholding will need to be valued taking into account the underlying asserts of the business.  In valuing a farm it is sensible to work closely with a good agricultural surveyor and the farm accountant.

    How does any Inheritance Tax get paid?

    If there is Inheritance Tax to pay, this becomes due to HMRC after six months from the end of the month of death.  After that time interest becomes payable on any outstanding Inheritance Tax.  It is possible to pay Inheritance Tax on certain types of assets, such as land and some business assets, in 10 equal annual instalments (or until the asset is sold, if sooner).  This can help with cash flow if an estate is made up of largely illiquid assets.

    More about the team

    We are a team of 11 specialist probate lawyers – one of the largest and most experienced in the South East, which means your matter will be dealt with effectively, efficiently and there will always be a member of the team available to help.

    As a full-service law firm we can draw on our years of expertise to help administer even the most complex estates to provide our clients with peace of mind.  

    Our accreditations include:

    • Most of our team who supervise and manage the preparation of wills are members of The Society of Trust and Estate Practitioners (STEP). It has published a Code for Will Preparation in England and Wales and as a firm, we adhere to this code in relation to work we do in connection with wills in this jurisdiction.  We are independent and are not part of any other company or group.  You can view the code on their website: www.step.org/ or we can send you a copy on request.
    • Band 1 in Chambers HNW and The Legal 500
    • Listed as one of the top law firms by ePrivateClient
    • Kent Business Legal Sector Review 2021 – scored us as number 1 for private client quoting “ TSP leads the pack for Private Client once again”
    • Lexcel - The practice is accredited by Lexcel for our excellence in legal practice management
    • All of our partners are also listed as Citywealth leaders.

     

     

  • Related Client Stories

    Thomson Snell & Passmore handle all agricultural and commercial property matters for major landowner

    Thomson Snell & Passmore acts for major estate in the East Midlands and major part of a village in the South East, acquired over several hundred years.

    Preparation of Deed of Variation to maximise Agricultural Property Relief

    Mark advised the beneficiary of a Life Interest Trust created by her late husband’s Will. Mark prepared a Deed of Variation providing for her life interest in the farmland to pass to her children. The Deed was drafted to maximise and secure the Agricultural Property Relief currently available, in case the land ceases to qualify for the relief by the time of the beneficiary’s death.

    The commercial property team advise on an Agricultural Holdings Act

    Thomson Snell & Passmore were instructed via land agents to help resolve an issue with the surrender part of an Agricultural Holdings Act 1986 (AHA) tenancy agreement of land in an estate, and a sub-tenancy (FBT) under the Agricultural Tenancies Act 1995.

    Probate sale of complex farming estate and farming business

    TSP’s multi-disciplinary team were able to provide a seamless, expert and sensitive service to a farming family with a farming company and a mixture of residential and agricultural property.

    Helping a trust to prepare their agriculture land for residential development and secure a sale

    This client story involves one of our longstanding clients; a Trust of which Gilbert Green is a Trustee.  Our client was able to gain from our knowledge of them, the site and our experience in negotiating planning agreements and dealing with national house builders.

    Frontier Agriculture v Bratt Brothers (a Firm) [2015] EWCA Civ 611

    A farmer acting in person has successively persuaded the Court of Appeal to set aside an order of the Commercial Court made against him which granted permission to enforce an arbitration award under 66 of the Arbitration Act 1996.

  • Latest Updates

    Farming for future generations: can changes to agricultural tenancies help new entrants?

    Increasingly, the younger generation is finding it hard to find their place in the agricultural world. In this article, Sue Lister looks at how changes for farming tenancies may help new entrants to the industry.

    ‘Landmark’ Agriculture Bill passed into law: what does this mean for you?

    After more than 100 hours of debate in parliament, The Agriculture Bill has received royal assent and now been passed into UK law.

  • Insights

Newsletter sign up

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We respect your privacy and want news to be relevant. To either, click here or update your preferences by emailing us at info@ts-p.co.uk. Your personal data shall be treated in accordance with our & .

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By submitting an enquiry through 'get in touch' your data will only be used to contact you regarding your enquiry. If you would like to receive newsletters from Thomson Snell & Passmore please use the separate form below.

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