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Where the transferee no longer holds the original property at the transferor's death then BPR will not be clawed back if the original property has been replaced with 'replacement property'¹.

The replacement property provisions will apply where²:

1. Ìý

   •ÌýÌýÌýÌý the transferee has disposed of all or part of the original property before the death of the transferor (or transferee if earlier)

2. Ìý

   •ÌýÌýÌýÌý the whole of the consideration received has been applied in acquiring the replacement property

3. Ìý

   •ÌýÌýÌýÌý the replacement property is acquired, or a binding contract for its acquisition is entered into, within three years (or such longer time as HMRC allow)³ after the disposal of the original property, and

4. Ìý

   •ÌýÌýÌýÌý the disposal and acquisition were at arm's length or on terms such as might be expected to be included in a transaction at arm's length

If these conditions are met then relief is available by the application of IHTA 1984, s 113A if⁴:

1. Ìý

   •ÌýÌýÌýÌý the replacement property is