IHT on a farm. Any guidance gratefully received.

[getorfmyland]

Deceased passed on in September this year leaving a farm in equal shares to 3 beneficiaries. The 3 surviving beneficiaries are all in their 70's.

1 beneficiary has nothing to do with the farm whatsover.

the other 2 were until recently in a farming partnership farming the land, whereup one decided to retire leaving the other to go about their usual business on the farm as a sole trader.

the 1 beneficiary remaining at the farm wants to buy out the other two beneficiaries.

Can anyone help me do a back of the fag packet calculation of the overall tax liability please? Additional facts are.

The farm is 200 acres and valued at £1.8m

for the last 15 years 70 of the 200 acres are used for tree planting with a subsidy from the forestry commission.

about 40 acres are rented to other farmers to grow crops.

The remaining acres are woodland used for pheasant shooting, with mature trees.

1 farmer has unilaterally given notice to the executors to terminate an Agricultural Holdings Act Tenancy. It is not clear if the executors have accepted the notice. This isn't confirmed.

What is the most tax efficient way to deal with the situation?

If a deed of variation is executed so that the 1 beneficiary remaining at the farm takes the whole farm under the will and he continues and expands the tree contracts (as well as continue the general commercial activities) then can he reduce the IHT liability to nil using a combination of reliefs.

How would paying consideration to the other 2 beneficiaries affect the position? Is it possible to couch it as a dispute settlement payment or settlement of potential damages claims (they are getting quite nasty with each other)?

Are the correct reliefs to apply Business property relief. I think that we can use the tree contracts to show that, in addition to other relief, the tree planting /woodland qualifies as a business asset which formally means we would be using the Inheritance Tax Act of 1984 (IHTA) where we can get 100% relief from this tax if the woodland is both commercially managed (there is a commercial arrangement for subsidy) and it has been owned for at least 2 years.

Can we also throw in the use of “Agricultural Property” and “Woodland Relief" (which from a brief, non expert, bit of reading) allows IHT to be deferred on the value of the growing timber until such time as that timber is felled and sold, which in practice may be an almost indefinite period.

Any help or guidance appreciated prior to instructing an accountant. We don't want to rack up professional fees until we know that pursuing a buyout with the funds available is a viable option.