Warning as to the future of Agricultural Property Relief
The Chancellor has asked the Office of Tax Simplification to conduct a review of inheritance tax, to which individuals, business owners and professional advisors are invited to respond.
The review is likely to result in changes to the way in which inheritance works in England and Wales, both the way in which it is charged and the way in which it is reported.
Although the scope of the review is wide, with many detailed questions being raised, our concern is that the likely focus will be on Agricultural and Business Property Reliefs, given that both have been in the spotlight for many years and we have long expected that one or other relief be restricted.
In particular, Agricultural Property Relief is likely to be subject to further focus and, although there is no guidance as to the overall outcome of the review or the changes which may be introduced, we ask all clients to bear in mind that it may not in future exist in its current form. If tax planning arrangements have therefore been made on the basis of its availability, now would be a good time to review them and consider other options. HMRC is under pressure to increase the revenue generated and it is therefore likely that restrictions will be introduced rather than the system becoming more generous.
For more information, please contact the Private Client team.