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Reassurance on Inheritance Tax Reliefs for farmers and landowners

19 Oct 2020

As we navigate the many difficulties arising during the pandemic, HM Revenue & Customs have offered some assurance in respect of certain Inheritance Tax Reliefs relevant to farmers and landowners.

Many landowners will be aware that their land can qualify for relief from Inheritance Tax under Agricultural Property Relief or Business Property Relief if certain conditions are met. There are however lesser known reliefs available on Heritage Property which can be helpful in reducing Inheritance Tax on an estate.

Heritage Property Relief can provide relief at up to 100% against Capital Gains Tax and Inheritance Tax if certain conditions are met. To qualify for the conditional exemption, owners of property which HM Revenue and Customs designates as important to the UK’s National Heritage give specific undertakings to HM Revenue and Customs which include allowing public access and preserving the property.

When lockdown was in place and Heritage properties were closed due to the pandemic, Heritage property owners could not satisfy their public access undertaking. HMRC were quick to issue a statement of advice in March after the lockdown was announced to reassure owners that they would not consider the agreement with the owner as being broken where owners closed Heritage properties or,  more recently, delayed opening the Heritage properties once the lockdown restrictions were relaxed.  HMRC will not expect Heritage properties to open later in the year to make up for any lost days which have been missed in 2020.


Similarly, if a conditionally exempt item is on loan to a museum or a gallery or other venue which closed due to Covid-19 then HMRC will not treat the withdrawal of public access to the object as if the owner has broken the agreement.  HMRC have reassured owners that this will apply even if the object is not shown at all during 2020.  Likewise, where a conditionally exempted object can only be viewed by appointment, HM Revenue and Customs will not expect the owner to agree to an appointment if government guidelines are still in place which mean that it is not possible for this to be done.

Losing reliefs could have a severe impact on Heritage properties and items and their availability for enjoyment by future generations. The prompt guidance from the Revenue is therefore welcome. As uncertainty continues in respect of the pandemic, it will be interesting to see if further guidance will be issued.

Should you have any questions or queries about Inheritance Tax and Capital Gains Tax Reliefs, please contact Alison Hall on 0191 232 8345 and alison.hall@hay-kilner.co.uk.