Farming families are being warned about the implications of inaccurately completing a death certificate, following a number of cases where the given occupation of the deceased was not correct, resulting in Inheritance Tax liability falling due when in actual fact, it should not have done.]
In many instances, elderly farmers continue to oversee the running of their farm, even though they are unable to carry out the more physical work themselves. In these cases, provided that the family farm is classed as an agricultural property and has been occupied for at least two years before the person’s death, then Agricultural Property Relief can be applied to the value of the property and land, meaning that 100% relief from Inheritance Tax is granted.
If the deceased is classed on the death certificate as being “retired” however, then APR is no longer applicable and their estate will fall liable to the usual 40% Inheritance Tax charged.
Retiring from farming can therefore have serious tax consequences therefore, and advice should be sought before making this move.