Barratt heirs serve notice on tenants: Cottages to be sold to pay inheritance tax bill

He was Britain's most prolific house-builder, whose mock-Tudor homes became a symbol of the aspirational middle classes. But the sons of Sir Lawrie Barratt, who died in December last year, have asked tenants on their 4,350-acre Yorkshire estate to leave their homes. They have written to residents asking them to vacate their cottages, as they need to sell them to pay inheritance tax.

Peter and David Barratt were left the magnificent Farndale estate by their father. Sir Lawrence "Brickie" Barratt bought the Yorkshire valley, noted for its pheasant shoot and annual display of daffodils, for a reported £1.5m in 1981. After his death last year, aged 85, his total estate – which included property in Northumberland and a villa in the south of France – was valued at £43,635,330. Now, his sons say they have been hit with a giant tax bill.

The Barratts own 45 properties in Farndale, 13 of which they plan to sell. Last week, affected tenants received letters from the Barratts' land agent, Laura Hardy of Strutt and Parker, informing them their homes are to be sold. "Peter and David have decided to sell a number of the residential properties in the estate in order to pay inheritance tax," says the letter. "It is thus with great regret that I am writing to advise you that the property you occupy is included in the number that they are selling."

It is thought that some tenants have been served with a Section 21 notice giving them until mid- October to vacate their homes. Most of the tenants are in cottages in the hamlets of Low Mill and Church Houses. Some are being told that their property is available to buy prior to it being advertised on the open market, but that tenants unable to buy must allow viewings or open days "with immediate effect".

One tenant, who wishes to remain anonymous, heard the news while on holiday abroad. She told The Independent on Sunday that she and her family – who "adore Farndale"– were "in a state of shock and totally distraught". Other tenants involved – some of whom are also on holiday – have similarly been left reeling by the news, which has come as a complete surprise. Some are seeking legal advice with a view to forming an action group before they formulate their response.

They are being supported by freeholders, one of whom said: "Treating the tenants like this is nothing less than feudal. It reminds you of the highland clearances. It should not be allowed to happen in the 21st century."

It is believed the Barratt brothers have had a timescale imposed on them in which they have to pay their inheritance tax bill and that they will have to sell properties in Northumberland as well as in Farndale in order to meet it. Had Sir Lawrie left his estate to his widow, who survives him, there would be no death duties to pay until her death. Furthermore, the Inland Revenue has a facility that allows inheritance tax on property to be paid over a 10-year period, to avoid forcing its sale. In some instances, property can even be handed over in lieu of inheritance tax, though this applies only to buildings of outstanding historic or architectural interest. Though the Farndale Estate lies within the North Yorkshire National Park, it is not thought it would be eligible for this provision.

Sir Lawrence Barratt was a self-made millionaire who counted Margaret Thatcher as a friend. The Thatchers even bought a Barratt home in Dulwich when she was in office, though they never moved in, choosing to live in Belgravia after Downing Street. Sir Lawrie enjoyed the boom years of the 1980s, flying between building sites in his own Barratt helicopter. One American journalist noted his "regal bearing", and he was said to enjoy his reputation as a grandee of the North-east. But last year he and his second wife, Lady Sheila, suffered a traumatic burglary at home. They were tied up and gagged by balaclava-wearing thieves, who made off with jewellery worth an estimated £1m. Already in poor health, Sir Lawrie never quite recovered from the shock and died a few months later.

A spokesman for HMRC said: "Due to taxpayer confidentiality we cannot comment on individual cases." Speaking on behalf of the Barratt brothers, Laura Hardy said: "Sir Lawrence died in December and his family are facing an inheritance tax bill which needs paying. As part of that they are selling some properties. There is no set time frame and each tenant has a different notice period, depending on the individual tenancy agreement." Asked whether the estate would help tenants seek alternative accommodation, she said: "We don't own any other houses."