Inheritance Tax Act 1984 section 177

Scottish agricultural leases

Section 177 provides relief from inheritance tax for certain Scottish agricultural tenancy interests by excluding the value associated with tacit relocation from the deceased tenant's estate.

• The value associated with the prospect of renewal by tacit relocation of a fixed-term Scottish agricultural lease is left out of account when valuing the deceased's estate.
• Where a tenancy interest is held by virtue of tacit relocation and passes to a new tenant on death, the value of that interest is also excluded from the estate valuation.
• These exclusions only apply if the deceased had been a continuous tenant for at least two years immediately before death, or had become tenant by succession.
• Any rights to compensation for tenant's improvements are not excluded and remain part of the estate value.