Inheritance Tax Act 1984 section 122

Agricultural property of companies

Section 122 sets out the conditions under which agricultural property relief can apply where the value transferred on a chargeable transfer is attributable to shares or securities in a company that owns agricultural property.

• Agricultural relief is available on company shares only where the agricultural property forms part of the company's assets, part of the share value is attributable to the agricultural value of that property, and the transferor had control of the company immediately before the transfer.
• If shares are sold within three years after a death and revalued as a minority holding under section 176, control is treated as not having existed, and any relief already given may be withdrawn.
• The rate of relief is 100% where the company's interest in the agricultural property carries the right to vacant possession (or the right to obtain it within 12 or 24 months), or where transitional provisions apply; otherwise the rate is 50%.
• Where relief applies through a company, the occupation and ownership conditions are tested by reference to the company's interest in the property and the supplementary rules in section 123 replace the usual minimum period requirements in section 117.