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HMRC internal manual

Inheritance Tax Manual

Loss on sale of land: procedures: what you should do when the relief is agreed

When the loss on the sale of land is agreed (either as claimed or after amendment) you will need to amend the estate on COMPASS by entering the allowable loss as a relief.

You should also consider if it is appropriate at this stage to repay any overpaid tax (IHTM31601). Generally you should look to make a repayment unless box 2 on page 4 of the IHT38 has been ticked, as further purchases or sales are planned. In this case you should check n with the taxpayers and ask whether they want an interim repayment. Any repayment should be made to those named on page 4 of form IHT38.

The relief can only be allowed on a provisional basis (IHTM33044) unless

  • four years and four months have passed since the date of death,
  • no further amendment (IHTM33044) to the relief is possible, or
  • box 1 on page 4 of the IHT38 has been ticked.

If the relief has been allowed on a provisional basis you will need to explain this to the taxpayers.