Book Review: Business & Agricultural Property Relief by Toby Harris & Chris Erwood
The latest edition of this highly technical book reflects the law as it stands at July 2014. The preceding (5th) edition was published in May 2011; changes in legislation since then, and recent case law in the complex area of business and agricultural property relief from inheritance tax, are addressed in this edition.
As Harris and Erwood state in the Preface, ‘This work is detailed and specifically aimed at the busy practitioner…’. The list of contents itself stretches to some 15 pages, followed by exhaustive tables of the statutes, statutory instruments, cases and examples found in the book. This all helps the practitioner to navigate around the book’s detailed and comprehensive content, showing clearly where relevant information might best be found for any given subject under consideration.
An introductory chapter looks at the history of agricultural property relief (‘APR’) and business property relief (‘BPR’), the interrelationship between the two reliefs and their territoriality. Following this, each relief is considered in detail, APR being addressed first, mirroring the priority it takes in the legislation. Throughout, examples appear in the text, exploring the practical implications of technical points under discussion. These are not just used to explore difficult areas, but also, occasionally, to remind the practitioner that straightforward matters can also go wrong. Usefully, each chapter also begins with a ‘Quick Guide’ section to its content.
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The first chapter on APR considers the kinds of property for which the relief will (and will not) be available, including a long section dealing with the complexities of farmhouses in relation to APR. The second chapter addresses agricultural value, rates of relief and occupation requirements, while the third focusses on areas of particular concern. These areas are multifarious and diverse, ranging from joint ownership to replacement property, specific valuation difficulties to grazing agreements.
Chapter 5 begins the detailed assessment of BPR, following the same pattern as for the examination of APR. This first chapter deals with property qualifying for the relief: it covers the different kinds of businesses and business interests that may come within the ambit of BPR; different types of qualifying shareholding, and its application to land and buildings used in a business. The following chapter discusses the rates of relief and limitations on its application: the period of ownership; replacement property; contracts for sale; liquidation/ winding up and the meaning of ‘quoted’ in relation to shares are all considered.
In chapter 7 the reader is guided though excepted assets, following which chapter 8 looks at valuation issues and the treatment of liabilities, including the new rules on the treatment of liabilities introduced in the Finance Act 2013. The next matter considered, having a whole chapter to itself, is the significant subject of ‘wholly or mainly holding investments’, a vital topic that needs to be understood to ascertain whether BPR may be available. Several recent and significant cases in this area (Zetland, Best etc) are specifically considered.
Once each relief has been dealt with in depth, the authors move on to consider wider and interrelated matters, which take up the remaining 14 chapters—over half—of the book. Technical matters including clawback, overlap of the reliefs, compliance and payment of IHT all have their place. But so too do the perhaps slightly more unusual subjects of tax shelters, general planning and will planning: all of these being valuable additions to the book for any practitioner advising on this complicated area. This edition helpfully includes reference to the GAAR rules introduced in 2013.
Other chapters deal with specific areas such as woodland and heritage property, the latter being given 4 chapters to address its intricacies. Both these reliefs operate by way of deferral of tax, but their inclusion—as the property they encompass could fall within the ambit of business or agricultural property in the broadest sense—evidences the breadth and depth of the material covered in this book.
The book draws to its conclusion with an array of helpful and detailed appendices, covering (inter alia) the relevant legislation and HMRC publications, and then with its index, which itself covers more than 20 pages. This index is clear, detailed and cross-referenced. The subject of ‘wholly or mainly holding investments’, for example, can be found alphabetically under a comprehensive BPR category near the beginning of the index, but also towards the end under its own categorisation, with appropriate cross-referencing. This means that however the practitioner approaches the index, needing to find relevant information they are likely to be able to track it down quickly.
This book will be a valuable addition to any Private Client library. APR and BPR are both hugely significant reliefs from IHT, and all practitioners in this area will find this sixth edition of Harris and Erwood’s work immensely helpful in tackling their intricacies.
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