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HMRC internal manual

Inheritance Tax Manual

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 business

or

  • 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 free

but

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

Agricultural property

Note that agricultural property (IHTM24030) qualifies for interest free instalments only to the extent that

  • its value is reduced by AR

or

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

Growing crops

There are separate instructions for the treatment of growing crops (IHTM24051).

Milk quotas

Where 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.