Inheritance Tax Act 1984 section 116

The relief

Section 116 sets out the percentage rates of agricultural property relief available for inheritance tax purposes and the conditions that determine whether the higher rate of 100% or the lower rate of 50% applies.

• Agricultural property relief reduces the agricultural value transferred by either 100% or 50%, depending on the nature of the transferor's interest in the property
• The 100% rate applies where the transferor has the right to vacant possession (or can obtain it within 12 months), or where the property is let on a tenancy that began on or after 1 September 1995
• Transitional provisions preserve the 100% rate for certain let properties where the transferor was beneficially entitled before 10 March 1981 and specific historical conditions are met, subject to value and acreage limits
• The 50% rate applies to all other cases, typically older tenancies that began before 1 September 1995 where the transferor does not have vacant possession rights