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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Restrictions on the freedom to dispose of assets: introduction

Restrictions or a fetter on an individual’s freedom to dispose of certain assets can reduce the value of an estate. For example

  • it may be agreed that a partnership interest shall on death pass to the continuing partners either without payment or at a favourable price, or
  • a friend or relative might be granted an option to purchase a property for less than the market price.

IHTA84/S163 deals with this sort of situation by ignoring the restriction and valuing property on the normal valuation basis unless certain conditions are met. These instructions look at the general rule (IHTM09772) for ignoring a restriction. They also look in detail at how we apply the legislation to options to purchase (IHTM09777). Restrictions on rights to freely dispose of a partnership interest are dealt with at IHTM25120.