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HMRC internal manual

Inheritance Tax Manual

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) is


  • 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 is more than the sale value, the difference is the loss on sale, IHTA84/S178 (1).

If the relief is due then the date of death value of the sold investments is reduced by the amount of the loss on sale, IHTA84/S179 (2).  It is not normally necessary to determine the revised value for each individual investment, although this might be needed for CGT purposes or where a claim for Double Taxation relief is involved.