Single farmers, divorcees and unmarried couples have access to much less inheritance tax relief than married couples, new analysis by NFU Mutual shows.
Sean McCann from NFU Mutual states that married couples can pass on up to £6.3m of agricultural assets free of the tax, whereas single farmers and unmarried couples are allowed just £3.15m.
The allowances are made up of £2.5m of agricultural and business property relief for each individual, which is transferable between married spouses. Other key reliefs include the £325,000 nil rate band, which is also transferable, and the 50% relief on the value of agricultural assets.
McCann gives the example of a farm valued at £6.5m, which comes from land worth £3.5m, machinery and stock at £1m, and farmhouse and yard at £2m. For a widower, who has full access to inheritance tax reliefs from his late wife, his estate will leave an inheritance tax bill of £40,000.
However, if the owner is a divorcee and therefore only has access to one set of inheritance tax reliefs, it leaves a tax bill of £670,000.
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