Inheritance Tax Act 1984 section 121

Successive transfers

Section 121 allows agricultural property relief to be claimed on a subsequent transfer even where the normal minimum ownership or occupation period has not been met, provided the property was eligible for relief on an earlier transfer and certain conditions are satisfied.

• Where agricultural property was eligible for relief on an earlier transfer and passes to a person (or their spouse or civil partner) who then makes a subsequent transfer, the normal minimum period of ownership or occupation under section 117 can be disregarded if the property is still occupied for agricultural purposes and at least one of the two transfers is made on death.
• The relief also applies where the original property has been replaced by other property, but the amount of relief on the subsequent transfer cannot exceed what would have been available had no replacement taken place.
• If only part of the value transferred on the earlier occasion was attributable to the agricultural property, then only a corresponding proportion of the value on the subsequent transfer qualifies for relief under this section.
• At least one of the two transfers — either the earlier or the subsequent — must be a transfer made on the death of the transferor for this section to apply.