New tax rate on conacre

In the case of a 32-acre family farm, the UK Special Commissioners of Income Tax have ruled that land let in conacre is to be reclassified as an investment activity.

The major consequence for landowners would be that conacre land may become subject to inheritance tax rates of up to 40%, when it passes to the next generation.

But it is not yet clear how broadly the “development potential” of conacre farmland referred to by the Commissioners might now be defined for taxation purposes.