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HMRC internal manual

Inheritance Tax Manual

Special valuation matters: woodlands relief claimed on the land

Where woodlands relief (IHTM04371) is available the valuation of the land on death should not take account of the value of the trees or underwood growing on it. However, a valuation of the trees or underwood will be required when they are subsequently disposed of by the beneficiary.

Therefore, where valuing land in a death estate on which woodlands relief appears to be due you should ask the VOA (IHTM23002) to

  • value the land without the trees or underwood. The VOA may refer to this as the ‘prairie value’ or ‘solum’ in Scotland.
  • confirm that the land is not agricultural property (IHTM24032) (woodlands relief is not due if the land is agricultural property – for example, if the woodland is a belt of shelter to farmland). Where there has been a disposal of timber (

IHTM04122) on which woodlands relief was granted you should refer to the VOA a copy of the account form IHT 100 submitted by the taxpayer along with any other relevant papers and proceed as follows

  • if the disposal was a sale, ask the VOA whether the consideration shown by the taxpayer can be accepted as full consideration for the timber disposed of and, if not, for an opinion of value of that timber at the time of disposal
  • if the disposal was not a sale, ask the VOA for an opinion of value of the timber disposed of at the date of the disposal