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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Sales of related property, etc: relationship between s.176 and loss on sale of land relief

If an interest in land is sold within 3 years of the date of death, the sale may qualify for relief under both the following provisions

  • sales of related property etc (IHTM09751), IHTA84/S176,
  • loss on sale of land relief (IHTM33132), IHTA84/S190 onwards.

But because the two reliefs have different definitions of a qualifying sale then this will not always be the case. You may find that a sale may satisfy one but not the other of these provisions, or indeed neither of the provisions.

Where both provisions apply and the taxpayers submit a claim for both of the reliefs you should revalue the property by first applying the loss on sale of land provisions. You should adjust the sale price under IHTA84/S195 to retain the original basis of valuation (IHTM33132) with the related or other property. Only then should you apply the rules on sales of related property. The IHTA84/S176 adjustment will be the sale price without the IHTA84/S195 adjustment.