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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Special valuation matters: land subject to loans under the Land Improvement Acts

Loans under the Land Improvement Acts are charged on the land and repayable by half-yearly instalments over a term not exceeding forty years. Each instalment is composed of two parts, principal and interest.

In valuing land subject to loans under the Land Improvement Acts the VOA (IHTM23002) will disregard any such charges to which the land is subject. But if he knows that the land is so subject he will endorse his report accordingly.

When you are aware of such a charge you should deduct from the value of the land

  • the principal outstanding at the date of transfer, and
  • any unpaid interest calculated up to that date