Business/Agricultural Property Relief - Period of Ownership

When assessing the period of ownership that the deceased held business or agricultural assets prior to death, when does this period commence? In this case, the deceased exchanged contracts to purchase farmland more than two years prior to death, but completion took place less than two years prior to death. Leaving aside the issues of replacement property, I need to advise on whether the ownership requirement is met.

I know that exchange is the usual tax point for a CGT disposal, and also that a deceased is not considered to own BPR/APR assets if he has entered into a binding contract for sale, but I cannot see any provision regarding when ownership starts.

Grateful for any pointers.

Tobias Gleed-Owen
Hewitsons LLP

The property must have been owned and occupied for agricultural purposes immediately before it’s a transfer for

  1. 2 years by the owner, a Company controlled by the owner or their spouse or civil partner;
  2. 7 years if occupied by another.

Your situation does not appear to meet that requirement.

Patrick Moroney
BWL solicitors

Ownership is simply ownership (slightly more meaningful than “Brexit means Brexit”, I know). CGT is only an exception because of the express provision under s.28

Andrew Goodman
Osborne Clarke LLP

IHTA 1984 s117(a) re APR.

Malcolm Finney

For an interesting discussion of “ownership” albeit in a CGT context see Higgins v HMRC [2017] UKFTT.

Malcolm Finney

Thanks for all the responses. I had said ‘leaving aside the issues of replacement property’ but perhaps I do need to mention them for clarity.
In this case, the deceased owned other agricultural property for over 7 years. He then sold the property and reinvested the proceeds in new agricultural property before his death. He completed the sale of his property and exchanged contracts to purchase the new property prior to death but died before completion of the purchase.
If the deceased is considered to own the new property then the requirement to own/occupy for the necessary period will be satisfied due to the replacement asset rules. My query is whether he will be considered to own the new property.
The PRs are obligated to complete the purchase after his death so it would be disappointing if the deceased is not considered to own qualifying APR assets at the time of death.

Tobias Gleed-Owen
Hewitsons LLP