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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Lifetime transfers: Transfer of part of an agricultural holding

The property transferred may not be within the definition of agricultural property (IHTM24030) when considered in isolation but be within the definition when considered as part of the transferor’s estate as a whole immediately before the transfer. An example is a transfer of a farmhouse by a transferor who retains the land to which it is appropriate (IHTM24036). You may need to consider whether the property transferred is agricultural property at different dates, and possibly with different results:

  • in determining the value transferred at the time of the transfer,
  • in relation to the additional conditions IHTM24173, and
  • in relation to the GWR provisions. (IHTM24200).

Whether the property transferred, such as a farmhouse, is agricultural property at the time of the transfer has to be considered in relation to the transferor’s estate as a whole, immediately before the transfer. So, the transfer of a farmhouse by itself can qualify for relief at the time of the transfer provided it satisfies the appropriate character requirements in IHTA84/S115 (2) as part of the transferor’s agricultural estate immediately before the transfer as well as satisfying the conditions for ownership (IHTM24100) and occupation (IHTM24070) for the purposes of agriculture (IHTM24060). Example 2 at IHTM24174 shows the reverse situation.