Inheritance Tax Act 1984 section 124

Contracts for sale

Section 124 deals with the circumstances in which agricultural property relief is denied because the property or shares are subject to a binding contract for sale at the time of the transfer.

• Agricultural property relief is not available where the transferor has already entered into a binding contract to sell the agricultural property at the time of the transfer.
• An exception applies where the sale is to a company in exchange wholly or mainly for shares or securities that will give the transferor control of that company.
• Where shares or securities qualifying for agricultural relief through a company are subject to a binding contract for sale, relief is similarly denied unless the sale is for the purposes of a reconstruction or amalgamation.
• However, where a binding contract for sale is at less than full consideration, the transfer of value arising from the shortfall may itself qualify for agricultural relief on the net value transferred.