IHTM24121 – Successions: Application of IHTA84/S120

Where the deceased/transferor has succeeded to the agricultural property ( IHTM24030) on someone else’s death (note that IHTA84/S120 does not apply if the deceased/transferor has acquired the property by way of a lifetime transfer) then for the purposes of establishing whether the occupation ( IHTM24070) and ownership ( IHTM24100) conditions in IHTA84/S117 are satisfied

• they are deemed to have owned it (and, if they subsequently occupy it, to have to occupied it) from the date of death, and
• if that other person was their spouse or civil partner ( IHTM11032), they are deemed to have owned the property and occupied it for the purposes of agriculture ( IHTM24060) for any period during which the spouse or civil partner did so.

Thus the conditions of IHTA84/S117 may be satisfied when they would not otherwise be. But you must still keep those conditions, especially the two and seven year periods - or the alternative periods where replacement property ( IHTM24110) is concerned - in view. If the first person to die was not the deceased’s/transferor’s spouse or civil partner, IHTA84/S120 (1) is of no help is satisfying

• the occupation test if the earlier death is within the two period in IHTA84/S117 (a), or
• the ownership test if the earlier death is within the seven period in IHTA84/S117 (b).

A buys a farm in 2000, which he runs as an owner farmer. A dies in 2004. By Will the farm is left to his daughter, S, who takes over and continues the farming business. S dies in 2005.

IHTA84/S120 (1) is no help in providing relief on the death of S because

• S died within two years of the death of A, and
• S was not A’s spouse or civil partner.

However relief may be available for successive transfers. See below.

Example 2

If the facts in example 1 are changed so that S is now A’s spouse, IHTA84/S120 (1) provides relief because

• S either occupied or is deemed to have occupied the property for agricultural purposes from the death of A,
• under IHTA84/S120 (1)(b) S is deemed to have occupied the property for agricultural purposes during the period A so occupied it so from 1986 to A’s death in2004.

Those two periods combine to enable S to satisfy the two year occupation test in IHTA84/S117 (a).