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HMRC lose appeal case on Agricultural Property Relief

HMRC’s appeal in Revenue and Customs Commissioners v Joseph Nicholas Hanson (Trustee of William Hanson 1957 Settlement) [2013] UKUT 0224 (TCC) has been dismissed in the Upper Tribunal.

This case concerned a claim that the farmhouse was agricultural property within section 115(2) of Inheritance Tax Act 1984 and considered the nature of the nexus required between a farmhouse and the agricultural land or pasture. It was held that the nexus is only occupation, in this case common occupation, and not occupation and ownership.

The Upper Tribunal added that common occupation will not always and necessarily constitute a sufficient nexus, thus allowing some scope for HMRC to argue, in other cases, that, where there is common occupation of agricultural land and a cottage, farm building or farmhouse, there is not a sufficient nexus.

As with all Inheritance Tax issues, full professional advice should be taken by members who consider this decision may have a bearing on individual circumstances.

A copy of the full judgement is available below.


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