Owning a few acres creates lifestyle opportunities and can also benefit future generations.

Buying UK land alone does not directly reduce your inheritance tax liability. Inheritance tax (IHT) is a tax that is levied on the value of your estate when you pass away, and it applies to the assets you leave behind. However, there are certain strategies and considerations that involve land ownership in the UK that can potentially help reduce your inheritance tax liability. It’s essential to consult with a qualified financial advisor or tax specialist for personalized advice because the rules and regulations regarding inheritance tax can be complex and subject to change.

Here are a few ways in which land ownership might be a part of an inheritance tax planning strategy:

1. Agricultural Property Relief (APR): In the UK, if you own agricultural land and meet specific criteria, your land may qualify for Agricultural Property Relief (APR). APR allows for a reduction in the value of agricultural property for inheritance tax purposes. To qualify, the land must be actively used for agriculture, and certain conditions must be met. The relief can be as much as 100% in some cases.
2. Business Property Relief (BPR): Similar to APR, Business Property Relief (BPR) can be applied to certain types of business assets, including land and property used in a qualifying business. If you own a business that utilizes land and meets the criteria, you may be eligible for BPR, which can also provide a reduction in the taxable value of your estate.
3. Gifting Land: One common strategy to reduce inheritance tax is to gift assets, including land, during your lifetime. If you survive for seven years after making the gift, it may be entirely exempt from inheritance tax. However, if you do not survive for seven years, the gift may still be subject to tax, with a tapering relief for the years between the gift and your death.
4. Trusts: Establishing certain types of trusts can help reduce your inheritance tax liability. By placing land into a trust, you can potentially remove it from your estate for tax purposes while still maintaining control over it to some extent.
   Agricultural Tenancies: If you lease agricultural land to a tenant under specific arrangements, it may qualify for Agricultural Property Relief, reducing the value of your taxable estate.
5. Sir James Dyson is now one of the largest landowners in the UK, running a productive farming enterprise across over 30 locations, which will be a highly tax effective way to pass on some of his vast wealth to family members.