Natural England
Conditional exemption from Inheritance Tax and Capital Gains Tax
You can apply to HM Revenue and Customs (HMRC) for conditional exemption if you have an Inheritance Tax or Capital Gains Tax charge on:
- land of outstanding scenic, historic or scientific interest
- buildings of outstanding historic or architectural interest
Assessors who deem a building or land as outstanding are likely to consider:
- land of outstanding scenic interest as having qualities well in excess of land of its general type (based on national rather than local standards)
- land of scientific interest as having special flora, wildlife, geological or physiological features
- land of historic interest as having special historical interest in national terms, such as being associated with a nationally important historical event or a registered landscape, park, garden or demesne (grade 1 or 2* or outstanding as appropriate)
- a building of outstanding historic or architectural interest is likely to be a listed building (grade 1 or 2* or A as appropriate) or a scheduled monument
If you have a building of outstanding historic or architectural interest, you can also get conditional exemption for:
- land essential for the protection of the buildings (amenity land)
- objects historically associated with the building
An advisory agency will assess your land or buildings and advise HMRC whether your property is outstanding. The agencies will also advise you and HMRC on what you need to do to maintain and preserve your property and to provide reasonable public access. HMRC will then decide whether or not to designate your property.
To get and keep the conditional exemption youll need to show HMRC how youll maintain and preserve the property and give reasonable public access. These conditions will usually be set out in a heritage management plan (HMP).
If you do not keep to the terms of the conditional exemption set by HMRC, you may have to pay the Inheritance Tax or Capital Gains Tax charge. For more information see the HMRC guide to conditional exemption.
Maintenance funds
You can transfer assets to a maintenance fund free of Capital Gains or Inheritance Tax to financially support the kind of property eligible for conditional exemption. Youll need to give an undertaking to HMRC - further details are in the HMRC guide to conditional exemption.
Heritage management plans and conditional exemption
An HMP sets out how you will maintain your heritage property and keep your conditional exemption. You may not need an HMP if your heritage property is small and easy to manage or you already have a good management plan. However you will find an HMP useful if your property is large and has several different heritage features.
HMRC and its advisory agencies also use the HMP when they check youre following the conditions of exemption for maintaining your heritage property and giving reasonable public access.
What to include in your heritage management plan
You may already have a management plan for some aspects of your property but an HMP thats written specifically for conditional exemption shows how you will:
- maintain and preserve the heritage property in the condition that helped it to be granted heritage status
- provide and maintain reasonable public access
Your HMP needs to include:
- whats significant about the heritage property (such as historic buildings, archaeology, designed landscapes and the wider historic environment)
- how the public will access it
- how you will maintain and preserve the heritage property, taking into account its significance and circumstances
- when you will be able to carry out the work set out in your plan
Your HMP should cover short-term (1 to 5 years), medium-term (10 years) and long-term (25 years) plans on how the heritage property will be maintained.
For medium and long-term plans you only need to outline how youll schedule repair and other works to maintain and preserve the heritage property. This is in addition to regular maintenance work.
You do not need to preserve the heritage property as a museum piece but any maintenance does need to protect its heritage significance. You must think carefully about any proposals for sudden or fundamental changes such as:
- changes in land use, including new development and demolitions
- changes in vegetation cover and management
- conservation techniques
- repair materials
For land of outstanding scenic, historic and scientific interest and outstanding buildings you should include:
- a map of at least 1:10,000 scale showing your propertys boundaries and access
- a survey that will act as a benchmark from when exemption is granted
- any management priorities and potential issues, including anything that needs early attention
- a general summary of the property covering its history and significant features essential for the conditional exemption
- your works programmes and how youll monitor progress
- how any tenants fit into the plan
- new and existing access for the public and how youll manage it
- how youll:
- consult others on changes to the heritage property
- review the heritage management plan
- let agencies inspect the site
- maintain these features and your general approach to management
You should also include:
- for land of outstanding scenic, historic or scientific interest - how you will maintain the land and preserve its character
- for buildings of outstanding historic or architectural interest how you will maintain, repair and preserve the buildings, amenity land and historically associated objects.
More detailed information about what to include in your HMP is given in Heritage management plans: guides for conditional exemption.
How much preparing a heritage management plan costs
Preparing an HMP can cost between 6,000 and 16,000. It depends on how large or complex your estate is. It can be less for a small or simple property.
Natural England heritage management plan grants
Natural England offers up to 50% grant funding towards the eligible cost of preparing an HMP for land of outstanding scenic, historic or scientific interest in England. You must cover the remaining costs yourself.
The grant funding period runs from 1 April to 31 March each year and is subject to budget availability.
Youre eligible to apply for a grant if all of the following apply.
- HMRC has designated the land as being of outstanding scenic, historic or scientific interest in England or recommended it for designation.
- You do not have an HMP, an existing HMP is more than 5 years old or an additional specialist survey or study will improve the understanding and management of the lands outstanding interest.
- The proposed HMP, survey or study follows the guidance on preparing HMPs or is agreed with Natural England.
- The proposed HMP, survey or study will be completed or be at consultation draft stage within the grant funding period of the financial year in which its awarded.
You cannot apply for an HMP grant for:
- capital works
- revenue or annual works
- detailed design proposals or supporting infor