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New IHT rules will benefit the agricultural sector

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Farmers could be among the beneficiaries of tweaks to Inheritance Tax (IHT) rules.

The Central Association of Agricultural Valuers (CAAV) said that changes being phased in over the next few years could make a big difference to the sector.

Under the new arrangements, individuals will be spared IHT on a house lived in by the deceased at any time, providing that the net estate does not exceed £2million and the property is passed to either a direct descendant or spouse.

Jeremy Moody, CAAV’s secretary, told a conference in Dorset that the new rules could present various new options.

“The world of having to die with your assets might be able to change,” he said.

“The upside of the Residence Nil Rate Band (RNRB) is that the relief is fundamentally objective, where agricultural property relief [from IHT] is fundamentally subjective and all revolves around the final two years of your life.”

Mr Moody said that combining new rules with IHT relief would help those who wanted to step back from active farming and were looking to rent out their property.