IHTM14671 - Fall in value relief: other property

Where the transferred property appears to be entitled to relief and is neither shares nor an interest in land, you may still have to make an adjustment under IHTA84/S139.

You will need to make an adjustment to the market value ( IHTM14626) on death or sale if the property was not in all respects the same at the death or sale as at the time of the chargeable transfer.

Make an adjustment so that

• if the change was depreciatory, the market value at the death or sale is increased by the difference between the market value at the time of the chargeable transfer and what that value would have been if the change had occurred before the transfer
• if the change was appreciatory, the market value at the death or sale is reduced to what it would have been had the change not occurred.

Where any benefits from the transferred property

• between the time of transfer and the date of death, or sale
• exceed a reasonable return on the market value at the time of the chargeable transfer

ignore the effect of the benefits when deciding whether there were depreciatory or appreciatory changes as above, but

• increase the market value at the date of death or sale by the excess of the benefits over the reasonable return.

This will apply, for example, where the transferred property is a short-term purchased annuity.