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HMRC internal manual

Inheritance Tax Manual

Loss on sale of land: changes in the interest or underlying land: valuation with, and sales without, other land

Where an interest in land (IHTM33061)

  • was valued at the date of death in conjunction with any other interest, and
  • the value of the interest on this basis is greater than it would have been if it was valued on its own

then the sale price (IHTM33072) is increased by the difference between

  • the value of the interest on death (IHTM33100), and
  • the value which would have been the date of death value if no other interests had been taken into account, IHTA84/S195.


At death, a field owned by the deceased is valued as part of a parcel of land which included adjoining land also owned by the deceased

The value of the field is £10,000

The separate value of the field at death would have been £8,000

Within three years of death it is sold without the adjoining land by a qualifying sale for £6,500.

The ‘sale value’ (IHTM33073) is £6,500 + (£10,000 - £8,000) = £8,500

Where the interest is sold separately from the other interests, you should ask the VOA to value the interest at the date of death when valued on its own. You should then adjust the sale price as above.

On the strict wording of IHTA84/S195 the adjustment is to be made not only where the interest in land is sold separately from other the interests but also where it is sold together with them. You should refer any case to Technical where a claim for relief is made and the interests were sold together.

Where the interest was valued with related property (IHTM09751) relief may also be available under IHTA84/S176 and takes the form of revaluation on death without reference to other interests.