Where the interest sold involves joint property (
IHTM15000) it is possible for the sale
price (
IHTM33072) to be less than the date of
death value (
IHTM33100) yet there will be no loss on
sale. This can arise if a share only in land is included in the
estate, but the entirety is sold.
The discounted date of death value agreed for, say, the
deceased’s one-half share of a property may turn out to be
less than one-half of the share of the gross proceeds of sale from
the whole of the property.
Example
The deceased owned a half-share of Blackacre.
At the date of death Blackacre was valued at £200,000
for the whole, £90,000 for the deceased’s half share.
A year after the death, the whole property was sold for
£190,000.
The sale value of the property for the purposes of
IHTA84/S191 is an arithmetic half share of the gross proceeds of
sale, £95,000.
Any claim would therefore be disadvantageous as additional
inheritance tax would in fact be payable as a result of the claim.
You should consider this instruction before issuing a form
IHT 38 (
IHTM33022) to help prevent the taxpayer
making a disadvantageous claim (
IHTM33013).
