IHTM24070 - Occupation: Introduction

A requirement for the application of agricultural relief is that agricultural property ( IHTM24030) that is occupied for the purposes of agriculture ( IHTM24060) must have been either

• occupied by the deceased/transferor for the purposes of agriculture throughout the two years preceding the transfer,
• or owned by the deceased/transferor throughout the seven years immediately preceding the transfer and the property must have been occupied ( IHTM24071) throughout the period for the purposes of agriculture ( IHTM24060). The identity of the occupier does not matter, but the continuity of such occupation is vital.

The occupation and ownership conditions of IHTA84/S117 do not affect the rate of relief ( IHTM24140) due on the agricultural property. They exist to ensure those who purchase agricultural land or buildings cannot transfer that property free of, or at a reduced rate of inheritance tax, shortly after its purchase. Where the property is not purchased the rules for occupation are relaxed as set out below and for ownership the relaxation of the rules is detailed at IHTM24101.

The one exception to the rule regarding purchases relates to a tenant farmer who purchases land they have been farming for their own profit. The tenant farmer will have been in occupation of the land, not their landlord. Accordingly, as long as that occupation has been for the purposes of agriculture throughout the two years preceding the transfer, the occupation condition is satisfied.