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HMRC Torpedoed As They Fail To Appeal Farmhouse Tax Tribunal

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Her Majesty’s Revenue and Customs (HMRC) have failed to appeal against a landmark tax tribunal which has helped protect farmhouses from Inheritance Tax liability.

The tribunal, now widely acknowledged as the ‘Golding Case’, had appealed an HMRC tax decision on a farmhouse situated within a 16-acre smallholding near Lichfield which belonged to a Mr Dennis Golding.
Following Mr Golding’s death in March 2007, Agricultural Property Relief was claimed on the farm to reduce liability of Inheritance Tax on the estate. HMRC accepted the claim but rejected the inclusion of the three-bedroom farmhouse. Taking the decision to appeal, a tribunal ruled in favour of Alan Neal, the lawyer who successfully led the case on behalf of Mr Golding’s executors.

Mr Neal, a partner at Midland-based MFG Solicitors said: “It’s no secret that the Revenue were anxious to win this case and the successful outcome has definitely torpedoed their endeavours to deny more farming families tax relief.

“The volume of interest generated has been phenomenal and it’s clear this is now a landmark case in relation to tax relief on farmhouses. A significant amount of cases have been held up awaiting the outcome of this decision and now it has been successfully concluded, I hope it will mean farming families receive the tax relief they are entitled to.”

Clive Beer of Savills, who acted as the expert witness on behalf of the taxpayer, said: “We are delighted with the outcome. However the case underlines a number of worrying aspects with regard to HMRC’s approach and gives cause for concern in the way they handle similar cases in the future”.
Mr Neal, who carries a national reputation in tax and agricultural law, won the tribunal in May 2011. HMRC had until mid-July to lodge an appeal.