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HMRC internal manual

Shares and Assets Valuation Manual

IHT Agricultural Property Relief: References to the Valuation Office Agency

Where AR has been claimed or is likely to be available, you should determine whether the conditions for relief are satisfied before you refer the papers to the Valuation Office Agency (VOA).

If the conditions for relief are satisfied, you should inform the VOA in your instructing memo. The VOA will then report in terms such as:

“The basis of valuation (item . . . . .) is appropriate for 100% [or 50%] relief.”

If the company’s main activity is clearly trading, so that BR will cover any part of the share value not qualifying for AR, you will not normally need to consult the VOA at all. However, you may still have to ask for the VOA’s opinion if it appears that any land or buildings owned by the company would qualify for neither relief.

Where BR is not available (often because of s.105 (3)), if it appears that the conditions for 100% AR are satisfied (for example, because the land is subject to a post-September 1995 agricultural tenancy) you should ask the VOA for his opinion of the open market and agricultural values of the property. However, if he is able to confirm that those two values are the same and that the basis of valuation is appropriate for 100% relief, his confirmation of those points is all that is required.

If the company owns agricultural property which on the face of it qualifies for relief at only 50% (where it is subject to a pre-1 September 1995 agricultural tenancy), you will need the VOA’s opinion of both the agricultural value and the open market value - since 50% relief will apply to the agricultural value and any excess of the open market value over that will qualify for no relief.

For further information see Chapter 24 of the Inheritance Tax manual at IHTM24033


Under s.115 “agriculture” may be taken to include

  • the breeding and rearing of horses on a stud farm


  • the grazing of horses in connection with those activities.

When instructing the VOA in such a case you should

  • indicate that agricultural relief has been claimed for what is described as a stud farm


  • request the VOA to confirm that the property was in fact used as a stud farm.

Refer any case to the Litigation and Technical Advice Team (LTAT) where the VOA disputes that the activity amounts to the existence of a stud farm.

Milk Quotas

The aim of the Milk Quotas (MQ) System is to limit the supply of milk within the European Union.

MQ may be described as a producer’s right to sell a fixed number of litres of milk a year without having to pay a levy.

In this context the term “producer” includes

  • an individual
  • a partnership; or
  • a company

farming as freeholder or under a tenancy or licence.

MQ is not an interest in land as such. It may be bought separately from land and may be valued as a separate asset. The valuation of MQ is normally undertaken by the VOA.

If dairy farming is, or may be, involved, consult the LTAT on

  • any queries to be raised


  • the procedure to be followed on reference to the VOA.

For further information see Chapter 24 of the Inheritance Tax manual at IHTM24250.

Other questions

If the replacement provisions for either the company occupation/ownership or the share ownership tests are in point, particulars of the replaced property and of the agricultural value at the time of its replacement should also be obtained before reference to the VOA is made.

  Additional Guidance: SVM150000