Buying farmland as an investment â€“ the facts
Buying farmland as an investment has long since been a well exercised means of reducing Inheritance Tax liability through both Agricultural Property Relief and Business Property Relief.
Consistent demand for farmland has resulted in a significant increase in price over the last few decades and an asset which has managed to retain its value, even throughout the unstable economic environment. All of which means that farmers are often unable to afford land which has been snapped up by investors, driving up and maintaining prices.
Parcels of farmland often have the opportunity of being 100% exempt from IHT which make them exceptionally valuable investments. However, to be eligible for both forms of relief, the land actually has to be worked and managed in the manner of typical farmland.
This should be bourne in mind when undertaking the whole process of estate planning and considering ways in which to minimise Inheritance Tax on your overall estate. A professional estate planner will be able to advise you of your commitments and the tax benefits of buying farmland to form part of your final estate.