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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Loss on sale of land: interest in land: definition

Rather than defining what is meant by the term ‘interest in land’ IHTA84/S190 (1) defines the sorts of interest that are not included within the definition. Under IHTA84/S190 (1) any estate, interest or right by way of a mortgage or other security, is not an interest in land for the purposes of loss on sale of land relief..

So, you should regard an interest in land as including:

  • any estate or interest in land and buildings
  • of any tenure
  • whether in the UK or outside, and
  • any interest in land or buildings under a trust for sale.

For the relief to apply the interest in land must actually be comprised in the deceased’s estate (IHTM04043). It is not enough that the interest in land only underlies what is included in the estate. For example, an interest in a partnership (IHTM33063) which holds land, but where the partner has no right to specific partnership assets, or a reversionary interest (IHTM16231) in land, are not interests in land that are comprised in the deceased’s estate.

If it appears that on death the deceased is entitled to the (sold) underlying interest in land you should refer the case to Technical.