IHTM33091 - Sales: compulsory purchase

Under IHTA84/S197 relief is available where

• an interest in land is acquired from the appropriate person
• more than three years after the death
• by an authority possessing powers of compulsory acquisition.

For a sale made outside the three-year period to qualify for relief the following requirements must be satisfied.

• the interest concerned must be sold to an authority possessing compulsory purchase powers following a notice to treat served either before or after the death but within the three year period, IHTA84/S197 (1) (provided that a notice to treat had been issued it does not matter that the sale is in events by agreement rather than by compulsory purchase)
• the sale results in a loss, IHTA84/S197 (2) (in other words the sale price ( IHTM33072), after any of the adjustments ( IHTM33111) which may be required, is less than the value on death ( IHTM33100).

This means that a sale outside the three-year period to such an authority can only increase the amount of relief provisionally given. You do not need to include a sale at more than the date of death value and you will not need to keep a case open simply to guard against such a sale.

Under IHTA84/S198 (4) an acquisition under a general vesting declaration or (in Northern Ireland) vesting order should be treated in the same way where the operative date, as distinct from the date the declaration or order is made, falls outside the three-year period. This treatment should not be extended to any other form of ‘deemed notice to treat’ such as the so-called ‘blight notice’ served by the owner of property adversely affected by planning proposals and requiring acquisition of the property by the appropriate authority.

You should refer all claims for relief where there is compulsory purchase to TG in the first instance.