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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: specific lifetime reliefs: interests in land: changes between transfer and death

You may need to make an adjustment to the market value of an interest in land at the date of death or sale to ensure that like is compared with like.

Under IHTA/S137 an adjustment is made where the transferred asset is an interest in land (which does not include a mortgage or similar right in view of IHTA84/S140(1)) and some change takes place between the date of the chargeable transfer and the date of death or sale, either in the interest itself or in the underlying land.

This includes for example, the grant of a lease, the demolition or erection of a building, or the extraction of minerals.

The following sections provide more detail.