Esther Lee

The farmer had entered into a farming partnership with members of his family prior to his death and had made various gifts in his lifetime, including some of his interest in the farm. Advising the executors in relation to these gifts and the reporting of them for Inheritance Tax purposes to HMRC. Agricultural relief was claimed on assets of the estate and some of the lifetime gifts made which resulted in no Inheritance Tax being due. We also advised the executors on the wording of the Will and trusts contained in the Will. This resulted in various advancements and appointments being made from the Will trusts to allow for the family to plan for their own tax positions and to maximise the potential of Agricultural Relief.

Working with the deceased’s accountant and family to gather the information to prepare the Inheritance Tax Account and report the estate to HMRC. Part of this process is reporting the value of the shares held in the company and claiming Business Relief to save over £8.5million in Inheritance Tax. Advice has also been provided to the beneficiaries in relation to a deed of variation to gift funds to a charitable trust. This gift would impact on the full Charitable Relief available due to the interaction with Business Relief. Advice has been given on how the full reliefs for both Business Relief and Charitable Relief may be obtained.

The deceased owned farm land in her sole name and further land owned as joint tenants with her surviving husband. Under the deceased’s Will she left her interest in her agricultural and business assets to trustees to hold on the terms of a discretionary trust. The land owned as beneficial joint tenants with her husband would not pass under the terms of her Will but instead to her husband by survivorship. During the deceased’s lifetime she had gifted shares in a farming company in which she had previously been the controlling shareholder to her husband and children. The jointly owned land was let under an Agricultural Holdings Act (AHA) tenancy to the company in which the deceased had, prior to the gift of shares, been the majority shareholder. Providing advice relating to the effect of the lifetime gift of shares and the reliefs available for inheritance tax. Advice provided as to whether the beneficial interest in the land held as joint tenants should be severed post-death or retained by the deceased’s husband, who is now the controlling shareholder of the company in occupation of the land, to obtain maximum possible reliefs for the family over time.

Along with normal estate assets such as bank accounts and his home, Esther has worked with the deceased’s accountant, executors and property valuers to provide to HMRC a value of the business interests and to consider to what extent the various businesses qualify for Business Relief. This resulted in saving the estate around £2,500,000 in Inheritance Tax.

The deceased’s estate is valued at approximately £7 million. Along with normal estate assets such as bank accounts and his home, Esther has worked with the deceased’s accountant, executors and property valuers to provide to HMRC a value of the business interests and to consider to what extent the various businesses qualify for business relief. This is important as this relief is hugely valuable to the estate and will potentially save the estate around £2,500,000 in Inheritance Tax. If Esther’s application is successful this will avoid the need for the executors to sell assets which are involved in the deceased’s business. This matter has been complicated further as the deceased held assets in Spain as well as the UK.