Inheritance Tax Act 1984 section 125

The relief

Section 125 provides a deferral relief for inheritance tax on the value of growing trees and underwood on non-agricultural land forming part of a deceased person's estate.

• The relief applies where part of the value of a person's estate at death is attributable to trees or underwood growing on non-agricultural land in the United Kingdom, provided the deceased owned the land for at least five years before death or inherited it without paying for it.
• If an election is made, the value of the trees or underwood (but not the underlying land) is excluded from the value transferred on death, deferring the tax charge until a later disposal of the timber.
• Tax becomes chargeable under section 126 when the trees or underwood are subsequently disposed of, for example by sale or gift, unless the disposal is to a spouse or civil partner.
• The election must be made in writing to HMRC by the person liable for the tax, within two years of the death or such longer period as HMRC may allow.