IHTM33170 - Loss on sale of land: purchases: agricultural relief (AR) and business relief (BR)

If you receive a claim for relief in respect of an interest in land (IHTM33061) which qualified for agricultural relief (AR) (IHTM24000) or business relief (BR) (IHTM26000) entirely at 50% at the date of death and the sale is at a loss, then 

  • the AR or BR is preserved at its original rate, and 

  • is applied to the substituted sale value (IHTM33073). 

If a claim is made to substitute a higher sale price for the date of death value and the land attracts relief at 50%, you should refer the claim to Technical.  

From 6 April 2026, there is a £2.5million 100% relief allowance on the combined value of agricultural and business property and any value over that amount gets relief at 50% (see IHTM25500).  This 100% relief allowance is apportioned between all items of 100% relievable property in the estate (IHTM25524). This means an interest in land may attract some relief at 100% and some relief at 50%.  If loss on sale relief is allowed, it will be necessary to check: 

  • whether the new value brings the total combined value of agricultural and business property under the £2.5m 100% relief allowance, in which case the reduction in tax will be limited to the tax paid on agricultural and business property over the 100% relief allowance amount 

  • whether the new value means recalculated tax in relation to property at more than one title of the estate (IHTM26211) 

You should refer any claims involving apportioned 100% relief allowance to Technical.  

If a claim is made to substitute a higher sale price (IHTM33072) for the date of death value (IHTM33100) where no tax is due on the sold land because the sold land attracts 100% relief, you should deny the claim (IHTM33026). 

Open market value different from the agricultural value  

Where the land attracts 100% AR, and at the date of death the agricultural value of the land was lower than the open market value, and the land attracted IHT, relief may apply as there would be an appropriate person (IHTM33050). The agricultural value of the land would need to be reconsidered on the basis of the sale value. Where this is the case, you should refer the claim to Technical. 

You should also refer to Technical any claim where there is a sale of more than one interest in land and the claim includes land that attracts AR or BR which has been sold at a higher value than the date of death value.