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HMRC internal manual

Inheritance Tax Manual

Pre-owned assets: property in charge: land

The POA charge applies where the chargeable person occupies any land (‘the relevant land’) FA04/Sch15/Para 3(1), either alone or with other persons, and either the

is met. The charge is subject to certain exemptions (IHTM44040) and exclusions (IHTM44030).


The meaning of the word ‘occupies’ should be taken quite widely. It goes wider than the chargeable person being physically present at the property concerned. Case law suggests that the word ‘occupy’ requires some element of control. So a visitor may not be in occupation (even someone who stays for an extended period of time due to illness) but someone who has a key and can freely enter and leave premises as they please is more likely to be in occupation; even if they are absent for significant periods. It does not necessarily mean the place you reside which implies a greater level of permanence so a lower threshold is required to satisfy the occupation condition.

A person may be in occupation if they are storing possessions in a property - but only if they also had the right of access to the property to use it as they wished - or if they were the only person with the means of access and used the property from time to time. Storing possessions on its own is not occupation, but may be evidence of occupation. The chargeable person would not be regarded as occupying a property from which they were receiving rental payments from the person(s) actually in occupation.

If the chargeable person’s use of the property is only very limited in its nature or duration, they may not be in ‘occupation’ for the purposes of the POA charge. Each case should be decided on the facts and circumstances relating to it. The guidance at IHTM14333 contains some examples where limited use or occupation of land does not gives rise to a reservation of benefit and are unlikely, on their own, to be ‘occupation’ for the POA charge.

Where the chargeable person was occupying part of their former property and was entitled to, and did, use the rest of the property from time to time, you should regard them as being in occupation of the whole of the property for the POA charge. On the other hand, if the chargeable person occupies a self-contained part of their former property and has no access to the remainder which is occupied by others, you should regard the relevant land as limited to the self-contained part. You should consider occasional visits to the remainder of the property in the same manner as social visits mentioned in example 2 at IHTM14333.