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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Loss on sale of land: claiming the relief

Before the relief can be given, a claim must be made by the ‘appropriate person’ IHTA84/S191 (1) (b) (IHTM33050). The claim must be made within 4 years of the end of the 3 year period during which qualifying sales can be made, IHTA84/S191(1A). This time limit came into effect on 1 April 2011. Before this date the claim period was 6 years from the date of the last payment or repayment.

The claim should be in writing and signed by the appropriate person. It must specify

  • the capacity in which the person is making the claim
  • the ‘interest in land’ (IHTM33061) sold
  • the date of sale (IHTM33071)
  • the parties to the sale, and
  • the price obtained.

Form IHT38 has been designed for this purpose.

The appropriate person does not have to wait until all the property that is to be sold is sold before making a claim. They can make a claim at any time. But making a claim too early may not work to the taxpayer’s advantage (IHTM33013) if later sales are made for a higher price.