Conditional exemption from capital tax helps owners keep estates intact and maintain them properly preserving the amount and quality of the nation’s privately owned stock of outstanding land.
Landscape

Breadcrumbs

What are the benefits of this scheme?

Ramblers in the countryside © Countryside Agency
Capital tax, presently 40%, is charged when land is transferred to a new owner. Sometimes heritage assets have to be sold or collections of individual assets are broken up to pay the tax. Less money is available to spend on maintenance of the heritage land, which in turn reduces the amount and quality of the nation’s privately owned stock of outstanding land.

If a capital tax charge arises, for example by inheritance or gift (but not sale) of outstanding land, owners can apply to HM Revenue & Customs for conditional exemption of that tax. If the land meets the appropriate standard HM Revenue & Customs, advised by Natural England, will designate it, for capital taxation purposes, as of outstanding scenic, historic or scientific interest. Conditional exemption from the tax helps owners keep heritage estates intact and maintain them properly.  

Alternatively, or additionally, owners can set up a Maintenance Fund, a trust fund to maintain heritage land. This involves designation (as above) and the Fund itself receives certain tax privileges such as exemption from the normal Inheritance Tax charge on settled property.

HM Revenue & Customs agrees to the tax exemption in return for agreed public benefits. The owner agrees to undertake specific actions to:

  • maintain the land
  • preserve its character
  • provide reasonable public access
  • publicise the access and the undertakings        

HM Revenue & Customs requires owners to report annually on the steps taken to comply with the undertakings. Natural England inspects the designated land every 5 years to check the land remains in good condition and the owners is providing and publicising the access as agreed. An owner who does not adhere to the conditions, or disposes of the property, will loose the exemption, and the tax will then become chargeable.

Public Access
Natural England interprets ‘reasonable public access’ as providing the public the opportunity to see those features or aspects of the land that contribute to its outstanding interest. 

We take into account:

  • The existing public rights of way network
  • Conservation of the outstanding features
  • Good land management practices 
  • Security, privacy and commercial requirements        

Owners must be prepared to publicise the access. They can do this locally, for example, by marking permissive paths with signboards or provide leaflets showing the routes of the paths. Other publicity may be necessary according to the facts of the case.

HM Revenue & Customs publishes relevant (though not personal) details such as location, terms of the undertakings and publish access arrangements on its website.

For more information on access to tax exempt estates and land visit the HM Revenue & Customs website.