APR successive transfers

  1. H and W farm but all farm in name of H. If H gifts half to W, and W dies before two years, will s121 IHTA (successive transfers) mean W’s estate attracts APR, provided she occupies for agricultural purposes on her death?
  2. H farms and gifts half the farm to W, and W dies 4 years later. Is it correct that W’s estate will not get APR unless she occupied it for agricultural purposes when she dies-and that she would get it under the 7 year rule (as relaxed by s121) even if she had not so occupied for the previous 2 years?

Simon Northcott

Relief is due under s 121 IHTA 1984 in the first example, so long as W or the PRs of H occupy for the purposes of agriculture at the time of death of W. This relief is limited to cases where either the first transfer of the subsequent transfer is on death. So f H gifts the land to W and W gifts the land to a third party within 2 years, there is no relief because neither transfer is on death and there is no provision for W to inherit H’s period of ownership/occupation for agriculture up to the time of the gift from H to W.

In the second example, if a third party is farming the land at the time of W’s death, s117(a) cannot apply- W has not occupied for agriculture in the two years to date of her death. S117(b) cannot apply because W has not owned the land for 7 years. S121 cannot apply because neither W nor the PRs of H occupy for the purposes of agriculture at the time of death of W.

Malcolm Gunn

M B Gunn & Co Ltd