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HMRC internal manual

Inheritance Tax Manual

Related property: the general rule for calculating the appropriate portion

The general rule for calculating the value to be included in the deceased or transferor’s estate is used in all cases other than those listed in IHTM09736.

Under IHTA84/S161 (3) the value of the combined unit (IHTM09732) is apportioned between the property in the deceased/transferor’s estate (IHTM04029) and the related property according to their separate values. For this purpose separate values are arrived at are arrived at as if the related property provisions did not exist. Each property is valued without regard to the other.



Blackacre and Whiteacre are adjacent parcels of land owned respectively by the deceased and his wife. Their separate values are £40,000 and £10,000. But because of the relationship between the two parcels of land – one has no access without the other – they together make a natural unit valued at £80,000.

On the deceased’s death the value of Blackacre is


(£40,000 ÷ £50,000) × £80,000 = £64,000