THE TAXMAN will not appeal a tribunal ruling that will allow farmers to exempt farmhouses from inheritance tax.
The tribunal ruled earlier this month that a property belonging to Dennis Holding, who passed away, was only acceptable for use as a farmhouse. Because of this, it was eligible for agricultural property relief to reduce inheritance tax liability.
HM Revenue & Customs had argued that the property was too large for a farm of that size and was in fact used as a home with no connection to Golding’s farming. However, the tribunal ruled that the farmhouse was suitable for a working farmer but not a modern arrangement.
The deadline has passed for HMRC to challenge the ruling.
Alan Neal, a partner at Midland-based MFG Solicitors, told Farmer’s Guardian: “It’s no secret the Revenue were anxious to win this case and the successful outcome has definitely torpedoed their endeavours to deny more farming families tax relief.
“The volume of interest generated has been phenomenal and it’s clear this is now a landmark case in relation to tax relief on farmhouses. A significant amount of cases have been held up awaiting the outcome of this decision and now it has been successfully concluded, I hope it will mean farming families receive the tax relief they are entitled to.”
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