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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Calculating the loss: how is the loss calculated?

To calculate the ‘overall loss’ on sale you compare

  • the total ‘value on death’ (IHTM34173) on the normal open market basis of


  • the ‘qualifying investments’ (IHTM34131) in the death estate
  • that are ‘sold’ (IHTM34151) by the ‘appropriate person’ (IHTM34161)
  • within 12 months after the death


  • the aggregate value of those investments at the time they were sold, the ‘sale value’ (IHTM34176) being


  • the price for which they were sold, or if greater
  • the best consideration which could reasonably have been obtained for them at the time of the sale.If the ‘value on death’ exceeds the ‘sale value’ the difference is the ‘loss on sale’, IHTA84/S178 (1).

Relief is given by reducing the date of death value of the sold investments by an amount equal to the ‘loss on sale’, IHTA84/S179 (2). It is not normally necessary to determine the revised value for each individual investment. (Exceptionally though the revised value for an individual holding (IHTM34240) may be required for CGT purposes or where a claim for Double Taxation relief is involved.)