Inheritance Tax Act 1984 section 119

Occupation by company or partnership

Section 119 deals with how occupation of agricultural property by a company controlled by the transferor, or by a Scottish partnership, is treated for the purposes of agricultural property relief.

• Where agricultural property is occupied by a company controlled by the transferor, that occupation is treated as occupation by the transferor for the minimum period tests under sections 117 and 118.
• Occupation of property by a Scottish partnership is treated as occupation by the individual partners, overriding the separate legal personality that a Scottish partnership has under the Partnership Act 1890.
• Although section 119 only refers to sections 117 and 118, it also effectively enables the succession rule in section 120 to be satisfied, so that a transferor who acquires control of a farming company after inheriting land can be treated as having occupied the land from the date of the earlier death.
• This means that where land is farmed by a company the transferor controls, the two-year occupation test or seven-year ownership test for agricultural property relief can be met through the company's occupation, combined with the succession provisions.