Law Report: Farmhouse was not "agricultural land"

Starke v Inland Revenue Commissioners. Court of Appeal (Lord Justice Stuart-Smith, Lord Justice Morritt and Lord justice Ward). 19 May 1995

Farmhouse was not 'agricultural land'

Technical requirements of

affidavit must be observed

Starke v Inland Revenue Commissioners. Court of Appeal (Lord Justice Stuart-Smith, Lord Justice Morritt and Lord Justice Ward). 19 May 1995.

The expression "agricultural land or pasture" in the first part of section 115(2) of the Inheritance Tax Act 1984 did not include buildings or other structures on the land, since they were more specifically included in the latter parts of the definition in that section.

Accordingly, a 2.5 acre site, containing a substantial six-bedroomed farmhouse and an assortment of outbuildings together with several small areas of enclosed land, used as part of a medium-sized farm which carried on mixed farming, did not constitute "agricultural land" so as to be exempt from inheritance tax.

The Court of Appeal dismissed an appeal by the plaintiffs, Colin Barrymore Starke and Peter Michael Barlow (executors of the will of Wilfrid Edward Arnold Brown) against the decision of Mr Justice Blackburne ([1994] STC 295) dismissing their appeal against the commissioners' determination, on 21 May 1993, that Highways Farmhouse, Wiggington Heath, Oxfordshire, which had been transferred on the death of the deceased on 13 May 1988, did not qualify for agricultural property relief from inheritance tax under section 116.

Section 115(2) "agricultural property" was defined as "agricultural land or pasture and included woodland and any building used in connection with the intensive rearing of livestock or fish if the woodland or building is occupied with agricultural land or pasture and the occupation is ancillary to that of the agricultural land or pasture; and also includes such cottages, farm buildings and farmhouses, together with the land occupied with them, as are of a character appropriate to the property."

Gordon Apsion (Hancocks, Oxford) for the executors; Michael Furness (Solicitor, Inland Revenue) for the commissioners.

LORD JUSTICE MORRITT said that the executors originally applied for judicial review of the commissioners' determination. That application was obviously misconceived. By their amended application they sought leave to appeal for an order that the determination was wrong. But in view of the need to demonstrate that the appeal was substantially confined to a question of law, the executors undertook not to contend that the property came within the third part of the section 115(2) as being "such cottages, farm buildings and farmhouses, together with the land occupied with them, as are of a character appropriate to the property". Nor did they contend it within the second part, as being "woodland and any building used in connection with the intensive rearing of livestock or fish". The only question was whether the property fell within the first part, as "agricultural land or pasture". The Interpretation Act 1978 required "land" to be read as including "buildings or other structures" unless the contrary appeared. The contrary must appear, if at all, from other parts of the definition. In that connection, the second part was not of assistance. But the third part referred expressly to the buildings and structures that would be most obviously included in the words "agricultural land" if the Interpretation Act applied in full. Considering the structure of the definition as a whole, with the exception of "woodland" all that followed the words "agricultural land or pasture" was concerned with the buildings of one sort or another which were to be included. In such a context it would be surprising to find that buildings were already included in the phrase "agricultural land or pasture".

Paul Magrath, Barrister

Starke v Inland Revenue Commissioners. Court of Appeal (Lord Justice Stuart-Smith, Lord Justice Morritt and Lord Justice Ward). 19 May 1995.

The expression "agricultural land or pasture" in the first part of section 115(2) of the Inheritance Tax Act 1984 did not include buildings or other structures on the land, since they were more specifically included in the latter parts of the definition in that section.

Accordingly, a 2.5 acre site, containing a substantial six-bedroomed farmhouse and an assortment of outbuildings together with several small areas of enclosed land, used as part of a medium-sized farm which carried on mixed farming, did not constitute "agricultural land" so as to be exempt from inheritance tax.

The Court of Appeal dismissed an appeal by the plaintiffs, Colin Barrymore Starke and Peter Michael Barlow (executors of the will of Wilfrid Edward Arnold Brown) against the decision of Mr Justice Blackburne ([1994] STC 295) dismissing their appeal against the commissioners' determination, on 21 May 1993, that Highways Farmhouse, Wiggington Heath, Oxfordshire, which had been transferred on the death of the deceased on 13 May 1988, did not qualify for agricultural property relief from inheritance tax under section 116.

Section 115(2) "agricultural property" was defined as "agricultural land or pasture and included woodland and any building used in connection with the intensive rearing of livestock or fish if the woodland or building is occupied with agricultural land or pasture and the occupation is ancillary to that of the agricultural land or pasture; and also includes such cottages, farm buildings and farmhouses, together with the land occupied with them, as are of a character appropriate to the property."

Gordon Apsion (Hancocks, Oxford) for the executors; Michael Furness (Solicitor, Inland Revenue) for the commissioners.

LORD JUSTICE MORRITT said that the executors originally applied for judicial review of the commissioners' determination. That application was obviously misconceived. By their amended application they sought leave to appeal for an order that the determination was wrong. But in view of the need to demonstrate that the appeal was substantially confined to a question of law, the executors undertook not to contend that the property came within the third part of the section 115(2) as being "such cottages, farm buildings and farmhouses, together with the land occupied with them, as are of a character appropriate to the property". Nor did they contend it within the second part, as being "woodland and any building used in connection with the intensive rearing of livestock or fish". The only question was whether the property fell within the first part, as "agricultural land or pasture". The Interpretation Act 1978 required "land" to be read as including "buildings or other structures" unless the contrary appeared. The contrary must appear, if at all, from other parts of the definition. In that connection, the second part was not of assistance. But the third part referred expressly to the buildings and structures that would be most obviously included in the words "agricultural land" if the Interpretation Act applied in full. Considering the structure of the definition as a whole, with the exception of "woodland" all that followed the words "agricultural land or pasture" was concerned with the buildings of one sort or another which were to be included. In such a context it would be surprising to find that buildings were already included in the phrase "agricultural land or pasture".

Paul Magrath, Barrister

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Customer Service / Receptionist

£14000 - £20000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Administrator - Legal Department

£19000 - £19665 per annum: Recruitment Genius: Are you looking to join an awar...

Recruitment Genius: IT Infrastructure Engineer

£30000 - £40000 per annum: Recruitment Genius: Our client is looking to find a...

Recruitment Genius: Technical Manager / Technical Executive

£25000 - £45000 per annum: Recruitment Genius: An exciting opportunity exists ...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss