Agricultural Relief

It seems that the deceased/donor will need to be a farmer too. Good in that it stops people gaming the system.

Michael O'Leary would be covered by this provision, as he subcontracts his farming role to others (and get periodic slots on Countrywide to reinforce his farming bona fides). The super rich will continue to use this measure.

Potential massive unforeseen issue here.

Husband, the active farmer, dies. No succession plan like many farmers so wife inherits.
Wife is not active farmer. Kids inherit from mother. Now cannot get Agriculatural Relief even if they are actively farming the land...

TheJackal said:

Potential massive unforeseen issue here.

Husband, the active farmer, dies. No succession plan like many farmers so wife inherits.
Wife is not active farmer. Kids inherit from mother. Now cannot get Agriculatural Relief even if they are actively farming the land...

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This is not the fault of Government though. Up to farmers to have their affairs in order the same as everyone else.

Does the surviving parent (no need to genderise it!) not have time to become an active farmer if they want to benefit from the relief before they pass on? What is the active farmer test? In reality a lot of farmer partners are actively farming anyway so it may not be a huge leap for them to satisfy requirements?

Currently, the land can also be leased for a period of at least 6 years to qualify as an active farmer. So the surviving parent can lease the land to qualify as an active farmer.

chippengael said:

land can also be leased for a period of at least 6 years to qualify as an active farmer

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But you must also pass the "Farmer Test", which is that at least 80% of your assets are agricultural.

Nothing about the Farmer Test in the press release

I was reminding people that in addition to the "active farmer test" (which can be satisfied by leasing out the land), beneficiaries must also pass the "farmer test" (at least 80% of assets are agricultural) to get agricultural relief. After thinking about it more, I don't think the "farmer test" would actually matter for the situation described, though, since the spouse doesn't need to use agricultural relief themselves (as they wouldn't have to pay CAT on the inheritance).

I don't know what happens if the spouse only lives for a short time after they inherit the land. As @tallpaul said, if a farmer wants their child to inherit the farm and they might qualify for agricultural relief then they should ensure that their will states this rather than allowing the complication of it possibly going to their spouse first.

I think the question of what happens if the spouse only lives for a short time after they inherit the land is answered in the Finance Bill:

Where, in the period of 6 years ending immediately prior to the date of
the gift or inheritance comprising agricultural property, the disponer
had become beneficially entitled in possession to that agricultural
property on the death of his or her spouse or civil partner, then
paragraph (b) of subsection (2) and subsections (4) and (5) shall, in
relation to that agricultural property, apply as if a reference in those
provisions to disponer were a reference to the spouse or civil partner
concerned for that part of the period during which the disponer was
not beneficially entitled in possession to the agricultural property
concerned.

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If I understand that correctly, it says that if the spouse lives for less than six years longer, then it is the spouse that died earlier that is used in the determination. That seems fairly reasonable, although I think it would have been nicer of them to allow the years of ownership of both spouses to be combined (so if one farmed/leased it for three years before dying and the other farmed/leased it for another three years before dying, then the child could still qualify as the two spouses combined would be six years).