HMRC internal manual

Inheritance Tax Manual

Interim reports: property in the market for sale

As a general rule, the VOA (IHTM23002) should not defer negotiations where land is in the market for sale, unless completion of the sale is imminent (say 2-3 weeks).

The taxpayer will have submitted a value in the IHT400 (IHTM10021) that, in theory, should fairly represent the market value of the land at the date of death and the VOA will also have sales in the vicinity to use as comparables. In most cases there should, as a result, be adequate background material to use as the basis for meaningful discussion. Given the volatility of the market over recent years, the further a prospective date of sale moves from the date of death the less relevance it has to the actual date of death valuation.

In addition, if the value of the property is agreed in an excessive figure (meaning that the value agreed exceeds the sale price) the taxpayer can submit a claim for loss on sale of land (IHTM33001) relief. Otherwise we are content to rely upon and stand by the advice and opinion of the VOA.

Where there is an application to defer negotiations because the land is in the market for sale you should clarify the circumstances with the VOA. The origin of the application to defer could be the VOA or the taxpayer. You should encourage them to continue negotiations wherever possible. If the VOA considers that the particular circumstances might warrant some deferment - because, for example, the property concerned is very unusual, please consult your Team Leader (if you are in Compliance Group) or refer the case to TSS (if you are in PC&S (IHTM02021)) for consideration. You should also consult your Team Leader (Compliance Group) or refer the file to TSS (PC&S) where you are unable to get discussions restarted.