Inheritance Tax Act 1984 section 117

Minimum period of occupation or ownership

Section 117 sets out the minimum periods of occupation or ownership that must be met before agricultural property relief under section 116 can apply to a transfer of agricultural property.

• Agricultural property relief does not apply automatically — specific time conditions must be satisfied before a transfer qualifies.
• If the transferor occupied the property for agricultural purposes, they must have done so throughout the two years ending with the date of transfer.
• Alternatively, if the transferor owned (but did not necessarily occupy) the property, they must have owned it throughout the seven years ending with the date of transfer, and during that entire period the property must have been occupied for agricultural purposes by the transferor or by someone else.
• Case law has established that grazing horses does not count as agricultural occupation, while Extra-Statutory Concession F16 allows occupation of a farm cottage by a retired farm employee to be treated as agricultural use.