Entitlement to agricultural and business property reliefs on farm business

Mr Gill died in November 2013. On his death he owned Woodlands Farm which comprised:

• the house in which he lived;
• a yard brick barn and outbuildings;
• 21.19 acres of bare agricultural land (permanent pasture); and
• a range of buildings and a yard let for the storage of commercial grass cutting equipment.

He also owned other property which consisted of permanent pasture a couple with storage buildings and a residential property which was let.

Mr Gill did not own any livestock but he allowed farmers to graze their animals on his agricultural land under annual grazing licences. He checked the livestock daily and carried out the husbandry and maintenance of the land. He grew vegetables on his farm and bartered them in the local shop. He claimed the single farm payment.

The taxpayers who were Mr Gill’s executors claimed agricultural property and business property reliefs although not on the...