Inheritance Tax Act 1984 section 118

Replacements

Section 118 deals with how the minimum occupation and ownership periods for agricultural property relief are applied when the transferor has replaced one agricultural property with another.

• Where a transferor has replaced one agricultural property with another, the occupation and ownership periods across all the properties can be aggregated to meet the minimum period requirements for agricultural property relief.
• For owner-occupiers, the combined occupation periods across the original and replacement properties must total at least two years within the five years ending on the date of transfer.
• For landlord owners, the combined ownership and occupation periods across the original and replacement properties must total at least seven years within the ten years ending on the date of transfer.
• The relief is capped so that it cannot exceed the amount that would have been available had no replacement taken place, though changes arising from partnership formations, alterations or dissolutions are ignored for this purpose.