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HMRC internal manual

Inheritance Tax Manual

Loss on sale of land: procedures: checking form IHT38

This page tells you what checks to make before you can agree the claim to loss on sale of land relief. You should try to complete all the checks and obtain any advice you need from Technical before raising enquiries about the claim.

Was the property sold within the time limits?

You should check that the date of sale of each interest in land (IHTM33061) was:

within four years of the date of death, or

within three years of the date of death, if the interest was sold for a higher price (IHTM33074).

If any of the sales were outside the time limits you should explain this to the taxpayer or agent. You will need to exclude these sales from the claim for relief, unless the property was sold subject to a compulsory purchase order (IHTM33091).

Has the correct date of death value for each property sold been included in the claim?

If not you will need to raise this with the taxpayer or agent and amend the claim.

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Is there evidence to suggest that the sale may not have been at arms’ length?

You should consider whether the instructions on non-qualifying sales (IHTM33081) apply and if necessary, raise the matter with the taxpayer or agent. In other cases, you should ask the VOA whether the sale was for the best consideration that could reasonably be obtained at the time (IHTM33072).

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Was any of the property held on a lease?

If the lease or an interest in the lease has less than 50 years to run then you must adjust the sale price (IHTM33131).

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Was the interest in land sold joint property?

You may need to adjust the loss (IHTM33181)

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Did any property qualify for agricultural or business relief at the date of death?

You will need to consider adjusting the sale price (IHTM33170)

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Have any of the questions 2-9 on page 3 been answered ‘Yes’?

If so you should follow the relevant instructions (IHTM33034) for dealing with each of these topics.

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Is the difference between the date of death value and the sale value more than 25% of the death value?

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) IHTM33035(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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Check that the arithmetic on page 2 is correct

If not, you should adjust the relief as appropriate.