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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Reduced account: replacing estimated values of property now chargeable

If property that was included with an estimated value (because it originally passed to an exempt beneficiary) is redirected, the personal representatives must also deliver a corrective account (IHTM10701) or corrective inventory (IHTM10751) showing the open market value of the property. If you have cause to challenge the open market value and secure an uplift, you should use the amended value in the corrective account or inventory rather than the original estimated value when you consider any penalty (IHTM36000) that may arise.

You may adopt the value returned in the IHT 400 as the personal representatives’ opinion of the open market value of the property redirected if

  • the personal representatives do not deliver a corrective account or inventory with an instrument of variation (IOV) (IHTM35011), and
  • the chargeable estate clearly remains below the threshold.

If an IOV is redirecting an item of land you may not be able to tell whether the estate will remain below the threshold. In this case, and any other case where a corrective account or inventory is not delivered in an estate and you are not sure whether the estate becomes or may become taxpaying, you should write to the personal representatives (or their agents) to either

  • request a corrective account or inventory, or
  • ask for a statement signed by all the personal representatives, confirming that the value in the IHT400 represents the open market value.