Liaison with Valuation Office Agency and other offices: Agricultural Tenancies
The value of an agricultural tenancy depends upon which statutory scheme applies, which in turn depends upon the date the agreement commenced. It is therefore important to identify if the tenancy is one to which the Agricultural Holdings Act 1986 applies (generally older agreements) or if it comprises a Farm Business Tenancy under the Agricultural Tenancies Act 1995. Further detail on agricultural tenancies is available in the Inheritance Tax Manual at IHTM24210 onwards. Accordingly, in any case where asset values are a significant factor in the share valuation, agricultural tenancies should be referred to the Valuation Office Agency (VOA) for an opinion of value.
It is important that the possession of an agricultural tenancy by a farming company is not missed. The deduction of rent in the company’s accounts affords a clear indication, but published accounts are not necessarily so detailed and tenancies may exist even though no rent is paid. Accordingly, wherever asset values are a significant factor in the valuation of a farming company’s shares, share valuers’ initial enquiries should include a request for details of any land tenanted by the company (unless the parties have already covered the point).
Also see the VOA’s website.
|Additional Guidance: SVM150000|