Chapter SVM112060

CourtHM Revenue & Customs
Record NumberSVM112060
Published date13 March 2016
s.123(1)(a) IHTA 1984

AR is only available for agricultural property which was either:

  • occupied by the company for the purposes of agriculture throughout the period of two years ending with the date of the transfer (the occupation test) or
  • owned by the company throughout the period of seven years ending with that date and throughout that period occupied (by the company or another) for the purposes of agriculture (the ownership test).

In strictness the occupation or ownership must be by the company in which the shares or securities are held. Occupation or ownership by a subsidiary should be referred to the Litigation and Technical Advice Team (LTAT).

The purpose of these tests is to prevent exploitation of the relief by a company switching into agricultural property shortly before death or a transfer.

For further information see Chapter 24 of the Inheritance Tax manual at IHTM24090 onwards (occupation) and IHTM24100 onwards (ownership).

There are additional requirements

  • for PETs which become chargeable (see SVM112140 onwards) or
  • when further tax becomes payable on a lifetime transfer chargeable when made as a result of the transferor’s death within seven years (see SVM112140 onwards).
  • for gifts with reservation (see Chapter 24 of the Inheritance Tax manual at IHTM24200 onwards).
For the purposes of agriculture

For the meaning of ‘agriculture’ see SVM112050

Whether land is occupied for agricultural purposes depends on all the facts of the case. Land which is principally...

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