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IHT and Agricultural relief

Can anyone just clear up what exactly the Agricultural relief rates of 100% and 50% mean with regards to IHT?

For example with this scenario, am I right in thinking.....

IHT limit is £325K
Nil rate property band £175k where applicable  - making £500k as the threshold before IHT kicks in.

Then agricultural land (this is where I'm trying to work out things)

Say land is worth £100k and the estate finances/house comes to £500k - total £600k

Is agricultural relief of 50% meaning....
£500k is safe from IHT and 40% tax is applicable on anything over and that 50% relief on the land worth £100k = 40% tax is due on £50k of the land.

And then if 100% relief applies = no tax is applied on the £500k of property/finances & the £100k of land.


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