You will need to adjust the sale price ( IHTM33072)
The same principles apply to these exchanges as apply to
adjustments for non-qualifying sales (
IHTM33141). If the claim relates to one
qualifying sale only, that qualifying sale price is increased by
the amount of the
excess of the market value of the exchanged
property over its value on death.
If there is more than one qualifying sale the excess must be appointed between them according to their respective losses (or gains) on sale using the ‘appropriate fraction’ ( IHTM33141) used for adjustments for non-qualifying sales. The example at ( IHTM33141) would therefore apply if property Z had been the subject of an exchange at a time when the market value was £55,000, that is to say £5,000 above the date of death value.
The VOA ( IHTM23000) should be asked to agree the market value of the exchanged land at the date of exchange. This market value should then be used to adjust the qualifying sale values as explained above.