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HMRC internal manual

Inheritance Tax Manual

Special valuation matters: property claimed to be subject to right of occupation by a third party

Where the taxpayer asserts that

  • a vacant possession basis of valuation of property owned by the deceased is not appropriate because the property is occupied by somebody else (usually by a relative), but
  • there is no tenancy agreement

it is for this office, and not the VOA (IHTM23002), to establish the basis of valuation after investigating what the taxpayers say.

You should refer any such case to TG to advise on the basis of valuation before any referral is made to the VOA.

Different instructions (IHTM23204) apply where the third party occupies the property rent-free under an enforceable agreement or court order.