IHTM10691 | Investigating supplementary form: D37 - Agricultural relief

This form is designed to provide information to support the deduction of agricultural relief on any of the 'event' forms IHT100. The equivalent form for IHT400 is form IHT414 (IHTM24255) The information provided should help to establish whether agricultural relief (IHTM24001) is available in straightforward cases, or point to areas where further enquiries may be necessary.

Question 1

Identifies the property by reference to which the relief is claimed. Look at the description of the property and make sure that it agrees with any plan and professional valuation that may be attached. The property should also be included on form D36 (IHTM10690), land buildings and interests in land.

Question 2a

There may be several agricultural properties upon which separate claims have been made. Each property should be identified on a separate D37, providing details for the amount of relief claimed and the rate of relief.

Question 2b and 2c

These questions apply if the claim relates to a chargeable event on or after 30 October 2024. From that date, after the relief allowance is fully used, relief is limited to 50%.

Note that the ‘relief allowance’ is reduced by the total of any agricultural relief or business relief that has previously been used.

Question 2d

If the answer to question 2d is “Yes”, you will need to establish that the transferor has occupied (IHTM24070) the property for agricultural purposes (IHTM24060) throughout the appropriate period.

Question 2e

If the answer to 2e is “Yes”, you will need to establish that the transferor had owned (IHTM24100) the property and that it had been used for agricultural purposes (IHTM24060) by the deceased or another throughout the appropriate period.

Question 2f

If the answer to 2c is “Yes”, you will need to identify which of the supplementary provisions are in point. This will be one, or possibly a combination, of the

• Succession (IHTM24120) provisions,

• Replacement property (IHTM24110) provisions, or

• Successive transfers (IHTM24130) provisions.

The transferor should explain which of the provisions apply and why they believe relief is still due. The interaction of these provisions can be very complex and you should refer any difficult or contentious cases to Technical

Question 3

This information is essential in establishing whether the transferor had owned (IHTM24100) the property long enough to qualify for relief. It can also be helpful in explaining how any of the supplementary provisions might apply if the property has been acquired in stages over the years.

Question 4

This question should only be answered if the transferor has answered “Yes” to question 2d. In general, arable and pastural farming will qualify for relief, but there are other activities that may not qualify as agricultural purposes (IHTM24060). You need to consider the land and each of the buildings separately and be prepared to restrict relief where any part of the property is not used for agricultural purposes.

Question 5

This question should only be answered if the transferor has answered “Yes” to question 2e. In this case it does not matter who has occupied the property as long as it has been occupied for the purposes of agriculture (IHTM24060) throughout the 7 years up to the date of transfer. You should review the periods of occupation (IHTM24070) to ensure this condition is met. You need to consider the land and each of the buildings separately and be prepared to restrict relief where any part of the property is not used for agricultural purposes.

The occupation by someone other than the transferor may be through a formal lease, a licence or some other arrangements. Question 5c asks for details of arrangements. You should consider the occupation carefully as the nature of the arrangement will have a bearing on the rate of relief (IHTM24140).

Question 6

How the land is occupied determines the rate of relief (IHTM24140). The answer to this question should provide information to support the rate of relief adopted. In addition, there was a major change in the structure of the relief in 1981. So that people who had organised their affairs to meet the requirements of the earlier relief would not be disadvantaged, transitional provisions (IHTM24145) were enacted. Where these apply, relief at the higher rate is preserved. The answer to this question should also provide information to show how, in these circumstances the higher rate of relief is due. The operation of these provisions can be complex and you should refer any difficult or contentious cases to Technical.

Question 7

This is to establish whether any farmhouse or cottages at the property were of a character appropriate (IHTM24050) to the agricultural land and thus qualify as agricultural property (IHTM24030). If on inspection the District Valuer (IHTM23031) considers that any land or buildings against which agricultural relief is deducted, does not qualify as agricultural property, an Initial Agricultural Relief Report (IHTM23084) will be sent. Any such reports should be referred to Technical urgently.

Question 8

Agricultural relief is not normally available for property that is subject to a binding contract for sale (IHTM24040) at the date of transfer. The answer to this question should enable you to identify any land concerned and where appropriate restrict relief accordingly. You should refer any difficult or contentious cases to Technical.

Question 9

If this question has been answered yes, the chargeable event involves a settlement holding business or agricultural property on 30 October 2024 that would have qualified for relief at that time. This is known as a 'pre-commencement settlement'. There are special rules that apply in this circumstance (see IHTM25551).