Inheritance Tax Act 1984 section 124A

Transfers within seven years before death of transferor

Section 124A sets out the additional conditions that must be met for agricultural property relief to apply when a lifetime transfer is made within seven years of the transferor's death.

• Agricultural property relief on lifetime transfers made within seven years of the transferor's death is only preserved if the transferee still owns the original property at the date of death, it remains agricultural property, it has been occupied for agricultural purposes throughout, and it is not subject to a binding contract for sale.
• For failed potentially exempt transfers, the relief is denied entirely if the conditions are not met; for immediately chargeable transfers, the additional tax on death is recalculated without the relief.
• If the conditions are satisfied for only part of the original property, a proportionate part of the value transferred qualifies for the agricultural relief reduction.
• Where the transferee dies before the transferor, the conditions need only have been satisfied up to the transferee's death, and replacement property rules under section 124B can preserve relief where the original property has been sold and replaced with qualifying agricultural property.