Building house on agricultural land - tax implications?

shell820810

My mum was left agricultural land from my grandad in his will. My dad currently uses it for grazing animals.

My mum is going to give me some of the land, as a site to build a house on.

What are the tax implications of that?
Is it different because its agricultural land?

Should we go to an accountant or a lawyer for advice?

SeniorSam

shell820810 wrote: »

My mum was left agricultural land from my grandad in his will. My dad currently uses it for grazing animals.

My mum is going to give me some of the land, as a site to build a house on.

What are the tax implications of that?
Is it different because its agricultural land?

Should we go to an accountant or a lawyer for advice?

.............The gift from your mother is not taxable to you, but needs to have been valued in order to establish the value of the gift in case it needs to be included in her estate when she dies if that is within seven years of the gift date. If the value is below £3,000, then the gift could be considered as within her annual gifting allowance. If in excess of the nil rate band allowance of £325,000 in this tax year, then any excess would be a tax payable by your mother immediatly at 20%.

Building on the agricultural land is another matter which will require sprecific permission and will be governed by rules connected with agricultural land.

Hope this helps

Sam

John_Pierpoint

Beware of an agricultural occupancy condition if and when you get planning permission.
Beware of the limitation on the size of a "garden" as against the part of the field that remains with an agricultural land use designation.
Be aware that there are special exemptions from Inheritance Tax for agricultural land, even some relief if it is rented out.

If the land has significant value as agricultural land beware of the double whammy of mum paying Capital Gains Tax now if grandad died a few years ago and then mum dying within 7 year with a possible exposure to Inheritance tax as well. Of it is still within two years of grandad's death, it may be possible by deed to leave the land directly to you from grandad.

John,

PS Who is getting the single farm payment on it?

lincroft1710

Unless the land adjoins existing housing, or you are employed in agriculture, or you intend to farm the land surrounding the house it is very unlikely you would get planning permission to build a house.

shell820810

John_Pierpoint wrote: »

Beware of an agricultural occupancy condition if and when you get planning permission.
Beware of the limitation on the size of a "garden" as against the part of the field that remains with an agricultural land use designation.
Be aware that there are special exemptions from Inheritance Tax for agricultural land, even some relief if it is rented out.

If the land has significant value as agricultural land beware of the double whammy of mum paying Capital Gains Tax now if grandad died a few years ago and then mum dying within 7 year with a possible exposure to Inheritance tax as well. Of it is still within two years of grandad's death, it may be possible by deed to leave the land directly to you from grandad.

John,

PS Who is getting the single farm payment on it?

My grandad died 6 years ago.
My dad is getting the farm payment on it

shell820810

lincroft1710 wrote: »

Unless the land adjoins existing housing, or you are employed in agriculture, or you intend to farm the land surrounding the house it is very unlikely you would get planning permission to build a house.

My cousin is building in the field beside it and is none of the above.
We have spoken to the architect and he is reasonably confident that we could get it. Only putting in outline planning at this stage - its worth a try.

lincroft1710

Your local council must have one of the most lenient planning departments in the country!

shell820810

lincroft1710 wrote: »

Your local council must have one of the most lenient planning departments in the country!

I'm in NI if that makes any difference?

planning_officer

shell820810 wrote: »

My cousin is building in the field beside it and is none of the above.
We have spoken to the architect and he is reasonably confident that we could get it. Only putting in outline planning at this stage - its worth a try.

From experience, architects say a lot of things and very few know a great deal about the planning system!!

Whilst I would normally be very negative about your chances of getting planning permission in a rural area - as you live in NI I'm not sure how restrictive the planning policies are there, so I'll confine myself to wishing you all the best!

John_Pierpoint

.............or North Cornwall, where there was a scandal about locals getting permission but the rest of us UK citizens getting refusals !

keigcf

Good luck if you can get it! We struggled for years and husband works on the farm fulltime. Also a new thing around here is that agricultural bungalows are tied to the farm so can't be sold off without selling the whole lot.... different if you've been gifted the land seperate, but something to be perhaps aware of.