CAT agricultural relief checklist

    Taxworld blog

    CAT agricultural relief checklist

    Posted by Alan Moore on 04 October 2017

     

     

     CATCA 2003 s 89

    YES

    NO

    1. Does 80%[1] of the value[2] of your assets consist of agricultural[3] property[4]?

    2

     8

    2. Do you pass the 80% test at the date of the inheritance[5]?

    3

     8

    3. Do you pass the 80% test at the valuation date[6]?

    4

     8

    4. Do you hold or expect to hold an agricultural qualification[7]?

    5

     6

    5. Will you farm agricultural property (including the gifted/inherited property) on a commercial basis and with a view to the realisation of profits for not less than 6 years commencing on the valuation date?

    10

     7

    6. Will you spend 50% or more of your normal working time meeting the condition in 5?

    10

     8

    7. Will you lease the agricultural property for not less than 6 years commencing on the valuation date of to an individual who meets the conditions in 5 or 6?

    10

     8

    8. Have you received a gift/inheritance subject to the condition that the gift/inheritance be invested in agricultural property within 2 years after the date of the gift/inheritance?

    2

     9

    9. Did you meet the condition in 8?

    10

     11

    10. You are entitled to agricultural relief

       

    11. No agricultural relief - you may be entitled to business relief

       

     

    Download a pdf copy of this checklist by clicking here.


    [1] The test does not need to be met as regards agricultural property which consists of trees or underwood.

    [2] The gross value before deducting any debts against the property (exceptionally, you are allowed deduct a mortgage against your main residence).

    [3] Agricultural land, pasture and woodland located in the EU; crops, trees and underwood growing on such land; farm buildings, farm houses and mansion houses (together with adjoining land of a character appropriate to the property); farm machinery, livestock and bloodstock on such property; EU single farm payment entitlements.

    [4] You are deemed to be beneficially entitled in possession to an interest in expectancy, property that is subject to a discretionary trust.

    [5] Generally this means latest death which had to occur for the successor to become beneficially entitled in possession to the benefit.

    [6] The valuation date for a gift is the date you received it. The valuation date for an inheritance is the earliest of:
    (a) the date the executor/administrator can receive the inheritance to give it to you
    (b) the date the executor/administrator actually receives the inheritance to give it to you
    (c) the date the executor/administrator gives the inheritance to you.
    The valuation date is the date of death if: someone gives you a gift in anticipation of their death, a power of revocation has not been used, the property passes by survivorship or under a trust.

    If there is no will, the valuation date for an inheritance is normally the date of the Grant of Administration.

    [7] SDCA 1999 Sch 2B; you are treated as having an agricultural qualification if you achieve it within 4 years of the date of the gift or inheritance.

    Topics: CAT, Agricultural relief, checklist, farmer test, 80% rule, active farmer

    Written by Alan Moore

    Founder and CEO of Taxworld LTD, Chartered Tax Adviser
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