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HMRC internal manual

Inheritance Tax Manual

Value and Valuation: Partnership interests

In any case where an interest in a partnership is included in a transfer of value, (IHTM04024) relief is due where part of the value transferred can be attributed to agricultural property (IHTM24030) forming part of the partnership assets provided the conditions for relief are otherwise satisfied.

In Scotland, the interest of a partner in a firm owning agricultural property will normally be entitled to business relief, in view of the separate legal persona of a Scottish partnership which can itself own heritable property.

In calculating the value attributable to the agricultural value of agricultural property, secured debts should be deducted primarily against the assets on which they are secured; and if the open market value of agricultural property exceeds its agricultural value, the liability should be apportioned between the agricultural and the excess values. (IHTM24152)

Unsecured liabilities should normally be deducted primarily against non-agricultural property and only then against agricultural property - apportioned if necessary, as above, between its agricultural and non-agricultural values.