I am dealing with an estate where Deceased was a ‘sole trader’ for the purpose of a running a small livestock business.
He operated the business from his home which had a small curtilage of land and woodland. The livestock were grazed on 90 acres which the Deceased leased on a Farm Business Tenancy. The valuation confirms that APR is not available. I am not surprised, but note on the accounts that the house is listed as a Fixed Asset. I would have thought that we are OK to claim BPR for the tractors and machinery but cannot see where the house would fit in?
Am I missing something. Happy to be pointed in the right direction and would wish of course to claim all possible relief for the family.
There could be an arguable case for APR on the property from which the farm business operated. In Hanson v HMRC it was held that common occupation of house and farmland was required for relief to be available and that is the case here. Grazing of livestock (but not horses) is a farming activity to which APR applies. There should normally be some nexus between the farmhouse and the land which is farmed, and of course the farmhouse must satisfy the character appropriate test.
BPR does not apply to farmhouses except as regards any part used exclusively for the business (IHTA 1984 s 112(4)). But BPR on the farm equipment should be claimed.