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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Transfers on death: land

Land of any description, wherever situated, is qualifying property for instalments.

However, the instalments are interest free (IHTM30363) only to the extent that the land:

  • is reflected in the value transferred by the transfer of a business or an interest in a businessor

  • its value is reduced by Agricultural Relief (AR) (IHTM24000).Otherwise the instalments are not interest free.

Business relief (BR)Land which qualifies for BR (

IHTM25131) does not necessarily qualify for interest free instalments. Whether the instalments are interest free depends on the paragraph of IHTA84/S105 (1) under which the land qualifies for BR:

  • if the land (including settled land) qualifies for BR on the transfer under IHTA84/S105 (1)(a), the instalments are interest freebut

  • if the land qualifies for BR only under IHTA84/S105 (1)(d) or (e), the instalments are not interest free.

Agricultural propertyNote that agricultural property (

IHTM24030) qualifies for interest free instalments only to the extent that:

  • its value is reduced by ARor

  • it is reflected in the value transferred by the transfer of a business or an interest in a business.

Growing cropsThere are separate instructions for the treatment of growing crops (

IHTM24051).

Milk quotasWhere a milk quota has been valued in effect as part of the land and AR allowed on the combined value, interest free instalments should be allowed on the same basis.