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The extension to Agricultural Property Relief

Agricultural Property Relief (APR) is an important Inheritance Tax (IHT) relief which operates by reducing the agricultural value of agricultural property, either by 100% or 50%, provided certain criteria are met. APR can be applied to reduce the value of lifetime transfers, transfers on death and charges arising on discretionary trusts.

Following a government consultation which concluded last summer, the Chancellor announced an extension to APR with effect from 6th April 2025.

APR will extend to land managed under an environmental agreement with, or on behalf of, the UK government, Devolved Administrations, public bodies, local authorities, or approved responsible bodies.

In order to qualify, such land will have to be registered by specific, approved bodies. Furthermore, the land will need to have been used as agricultural land for at least two years prior to the change of use – the management under an environmental agreement – regardless of how long the environmental activities on the land subsist.

This will undoubtedly be welcome news for farmers and landowners at a time when they are being expected to take central roles in the country’s environmental agenda.

Article written by Oliver Clark – Trainee Solicitor in the Private Client Department

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