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HMRC internal manual

Inheritance Tax Manual

Loss on sale of land: purchases: background

Under IHTA84/S192 you need to adjust the sale price if:

  • the appropriate person (IHTM33050), while acting in the same capacity, purchases an interest in land (IHTM33061), and
  • the purchase price (or the aggregate of the purchase prices) does not exceed the aggregate sale prices (IHTM33072) on all qualifying sales.

The sale price must be adjusted in line with the instructions at (IHTM33162) and (IHTM33163).

If the purchase price (or the aggregate of the purchase prices) is more than the sale price, no sale of land relief is due at all.

You should note the following points:

  • purchases are taken into account only if they are made during the period beginning on the date of death and ending not later than four months after the last qualifying sale
  • a qualifying sale for this purpose is one that is made within three years of the date of death (no account is taken of any sales in the fourth year IHTA/S197A(3))
  • the sale price is that arrived at after making any adjustments necessary for changes in the interest or underlying land (IHTM33121), statutory compensation received (IHTM33130), leases (IHTM33131) and valuations with reference to other interests in land (IHTM33132)
  • the purchase price does not include expenses.