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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Gifts with reservation of benefit: Agricultural property at the time of the GWR charge

Whether the property is agricultural property (IHTM24030) at the time of the GWR charge (IHTM24200) will depend on whether the charge arises on the death of the donor, FA86/S102 (3), or when the reservation ceases, FA86/S102 (4).

For charges on the death of the donor

  • the property is treated as part of the deceased’s estate immediately before the death, so you can decide whether it is agricultural property within the meaning of IHTA84/S115 (2) by reference to the assets in the deceased’s death estate (IHTM04029) as a whole.

For charges on the release of the reservation

  • the donor is treated as having made a PET (IHTM04064). The availability of relief must be determined on the basis of a notional transfer (IHTM24205) by the donee, FA86/SCH20/PARA8 (1A)(b) at the time of the GWR charge. You should decide whether the property is agricultural property by reference to any qualifying agricultural property in the donee’s estate at the date of the release of the reservation.

The property must also satisfy the additional conditions (IHTM24173) for lifetime transfers chargeable on death.