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HMRC internal manual

Inheritance Tax Manual

Special valuation matters: benefit of building contracts

Where it is known that

  • the deceased had entered into a binding contract for work to be done on his property, and
  • at the date of death the work had not been completed

you should

  • inform the VOA (IHTM23002) accordingly, and
  • indicate the cost of the work, where known

The VOA’s o/v (IHTM23141) should reflect

  • the benefit of all work to be done under the contract, but
  • without deduction for payment to be made under the contract

The payments to be made under the contract will therefore be deductible as liabilities (IHTM28000) of the estate.