Occupation of farmhouses, cottages and farm buildings: Cottages
It is for you to decide whether a cottage which is temporarily vacant is being genuinely held for the purposes of agriculture (such as where one farm-worker has vacated and another is shortly to take up occupation) and should be treated as also satisfying IHTA/S117 (and would otherwise appear to satisfy IHTA84/S115 (2)). It will be a matter of fact and degree whether it remains ‘occupied for the purposes of agriculture’.
Farm cottages let to a person unconnected to the agricultural land that is subject to the transfer are unlikely to qualify for relief. The Upper Tribunal in HMRC v Atkinson and another  UKUT 506 (TCC) gave the following example:
‘Suppose that a cottage, whilst remaining of a character appropriate to the agricultural land within the farm, is temporarily let for a period of, say, 1 year to a person having nothing to do with agriculture. The cottage would not then be occupied for the purposes of agriculture.’