Agrcultural Property Relief - period of ownership

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Husband and wife had been in partnership for many years. Farm owned by husband in sole name. He enters into a Declaration of Trust transferring half his beneficial owernship to his wife so they become joint beneficial owners. Wife dies within 2 years. Does her share qualify for APR? I've studied IHTM manual. There's an example at https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm24123 where H dies and leaves farm to W who is deemed to have acquired it when H aquired it. But in my client's case H was alive when he transferred to W and IHTM's silence suggests that W won't be deemed to aquire H's holding period. Can anyone confirm please?

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By Tax Dragon
04th Jan 2019 12:35

You’ve gone past the answer. Read s117(a) and then reread IHTM24072.

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Replying to Tax Dragon:
Morph
By kevinringer
04th Jan 2019 13:15

So the answer is 'no', she does not acquire her husband's period of ownership because he was alive when he transferred beneficial ownership it to her.

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Replying to kevinringer:
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By Tax Dragon
04th Jan 2019 13:27

I agree, but is it relevant?

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Replying to Tax Dragon:
Morph
By kevinringer
04th Jan 2019 13:43

Yes because she owned the asset for less than 2 years it won't qualify for APR.

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Replying to kevinringer:
Morph
By kevinringer
04th Jan 2019 14:03

[deleted because posted in error]

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By Tax Dragon
06th Jan 2019 09:10

What I'm asking, kevinringer, is where does it say that she needs to have owned it for two years?

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Replying to kevinringer:
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By CTA
06th Jan 2019 11:18

Gosh Kevin, this is like pulling teeth. I’ll try and put you out of your misery.

S117(a) requires the transferee (wife) to have OCCUPIED the property for the purpose of agriculture for two years prior to the transfer (her death).

Occupied does NOT mean owned.

A person who farms a property is in occupation (IHTM24072).

You have stated “Husband and wife had been in partnership for many years.”

Presumably, therefore, wife has OCCUPIED the the property for the purpose of agriculture for two years prior to the transfer (her death) and so APR would be in point, regardless of the fact that she has not owned it for two years. You’re asking the wrong question.

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Replying to CTA:
Morph
By kevinringer
06th Jan 2019 11:31

Thanks for making it so clear. You are quite correct, she has indeed OCCUPIED the property for more than two years. Thanks for your patience and sorry for being so dense. I'll blame it on the long January hours.

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Replying to kevinringer:
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By Tax Dragon
06th Jan 2019 13:50

Not sure why my above comments [Edit: and this one!] have gone out of order.

But thanks, CTA. It's clearly not enough to tell people where the words are. We need to bring the words into the thread itself.

Or maybe we need legislators to learn from you and put the words in capitals? (No offence, kevin. You are far from the worst!)

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Replying to Tax Dragon:
Morph
By kevinringer
06th Jan 2019 14:00

I'm grateful to you TaxDragon not only for answering my question but also teaching me something else: to read the legislation carefully. I was familiar with occupied and ownership conditions but somehow had got them intertwined and was interchanging them when they should not have been.

PS I can answer why your posts have gone out of order. You published 2 posts earlier today, I responded to the first after you had published the second and the thread has continued with your first post.

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By Tax Dragon
06th Jan 2019 14:21

Yeah but I posted my first post second..... doesn't matter.

For future reference, when I invite you to read the legislation, I mean use your eyes, not your memory. That's what I did to work out the answer, so I knew it was a useful thing to do.

Edit: obviously I used my eyes, not yours. That'd be weird.

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Replying to kevinringer:
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By Tax Dragon
06th Jan 2019 09:08

And? You know me by now – point me at some statute (or even some guidance).

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