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HMRC internal manual

Inheritance Tax Manual

Valuation: introduction

Inheritance tax is charged by reference to the value transferred by a chargeable transfer (IHTM04021). The way that we go about valuing assets is therefore fundamental to the charge. The general rule is that the value of any asset is its ‘open market value’ (IHTM09703). However, some specific assets (IHTM09702) need special attention and the IHT legislation, as interpreted by case law, contains other rules that tell you

  • when you should value items separately (IHTM09715) and when you should bring assets together (IHTM09712) for valuation purposes
  • what to do if there is property (IHTM04030) in the deceased’s or transferor’s estate that is related to property (IHTM09731) in a spouse’s/civil partners (IHTM11032) estate or the property of a charity, and
  • how to value assets when there are restrictions on the freedom to dispose (IHTM09771) of property.

One of the most important features of IHT is the ‘estate’ (IHTM04029) concept, which means that we must bring together (IHTM09712) different parts of the same property owned by different parts of an estate.