beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Inheritance Tax Manual

Loss on sale of land: changes in the interest or underlying land: where revaluation is for more than the death value

Where the revaluation of the interest results in a revised date of death value (IHTM33100) that is greater, the sale price (IHTM33072) is reduced to what it would have been if the changes had not occurred.


At the date of death the market value of a parcel of land is £50,000.

Within the four year period a house is built on the land.

The market value at the date of sale of the land with the house is £300,000.

But, without the house, the value of the land would have been £45,000

If the house had been on the land at the date of death its value would have been more than £50,000 (the value of the land at the date of death).

For relief purposes the sale value is taken to be £45,000. 

You should ask the VOA (IHTM23185) to agree the value of the interest at the date of sale (IHTM33071) as if the changes had not occurred and the interest remained in the same condition it was in at the date of death. This revised value is the sale value (IHTM33073).