Chapter IHTM24172

Published date20 March 2016
Record NumberIHTM24172
CourtHM Revenue & Customs

The additional conditions for deciding whether agricultural relief is due on lifetime transfers made on or after 18 March 1986 and within seven years of the transferor’s death are contained in IHTA84/S124A and IHTA84/S124B. The conditions are designed to deny relief in connection with charges arising on the transferor’s death if, very broadly,

  • the transferee has disposed of the agricultural property without replacement
  • it is no longer used for agricultural purposes, or
  • it is not agricultural property at date of death.

As the name suggests, the conditions are additional, so it is essential that,

  • where the transfer is a failed PET (IHTM04057), it would have qualified for relief at the time it was made, and
  • where the transfer was immediately chargeable (IHTM04067), that it did then qualify for relief.

The conditions affect

  • the value transferred by a PET (IHTM04057), IHTA84/S124A (1) and
  • the additional tax payable on an immediately chargeable transfer (IHTM04067) following the transferor’s death within seven years of the transfer, IHTA84/S124A (2).

The additional conditions do not apply to gifts with reservation (IHTM04071) where the reservation was still in existence at the date of death because there are separate rules (IHTM24200) that apply to this type of gift. But they will apply where the gift has ceased to be one with reservation so that the donor is treated is having made a deemed PET (IHTM04064) during their lifetime.

The rate of relief (IHTM24140) (whether the higher or lower rate) and the value on...

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