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HMRC internal manual

Inheritance Tax Manual

Woodlands: the conditions for relief

Under IHTA84/S125 the relief is available only if all the conditions on this page are satisfied

The value of the deceased’s estate (IHTM04374) immediately before death must be partly attributable to the value of land,

  • situated in the United Kingdom or another state within the European Economic Area (IHTM04377),
  • on which trees or underwood are growing, but
  • which is not agricultural property (IHTM24030) as defined for the purposes of agricultural relief, IHTA84/S125 (1)(a)

The Valuation Office Agency (VOA) will advise if relief should be refused as the land is agricultural property because, for example, the woodland consists of a belt of shelter to farmland.

Also, the deceased must either

  • have been beneficially entitled (IHTM04031) to the land throughout the five years immediately before death, or
  • have become beneficially entitled to the land other than for consideration in money or money’s worth. The question of beneficial entitlement is considered in more detail at IHTM04376.

This provision means that if the deceased purchased the land, then he must have owned it for at least 5 years before his death, but if he did not purchase it, i.e. it was given to him or inherited by him, there is no minimum ownership period.

Finally, the person liable (IHTM30021) for the whole or part of the tax must elect in writing (IHTM04375) for the relief.