Farmers Weekly quotes Henry Fea on how IHT exemption for significant heritage property works

The possibility of an exemption from inheritance tax (IHT) on the grounds that land or
buildings are of heritage significance has attracted a lot of media attention in the past few
weeks.

HMRC’s conditional exemption tax incentive offers the owners of certain land and buildings exemption from IHT and capital gains tax (CGT) when they pass either by inheritance or as a gift.

This is only available where land is of outstanding scenic, historic or scientific interest, and tax and legal advisers caution that a decision to claim it must be very carefully weighed.

Henry Fea, Private Client Partner, shares his thoughts on conditional exemption with Farmers Weekly:

"Conditional exemption is normally considered the tax planning of last resort because it only defers the tax.

"Families will need to be very sure that they are happy to retain the land, and keep the undertakings, before entering into the conditional exemption regime, otherwise the ultimate tax burden to unwind that arrangement could be much higher than that which they sought to defer initially."

Exemptions are granted with conditions attached, requiring reasonable public access and maintenance of the heritage assets.

"Consider the practicalities of allowing public access, including health and safety, parking, toilet facilities, disabled access, risk of trespass and theft, any change of use or planning consents required, and so on.

"On the positive side, it can result in additional sources of income, including from entry fees, parking, cafes and other enterprises."

Read the full piece in Farmers Weekly here.