Chapter IHTM23185
| Published date | 20 March 2016 |
| Record Number | IHTM23185 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
If the taxpayer informs you that land has been sold within 4 years of the death for less than the value agreed for the date of death loss on sale relief (IHTM33001) may be available. However, these instructions concentrate on the affect of sales on ascertaining the date of death value of the property. In particular, they identify certain situations in which a Valuation Office Agency (VOA) (IHTM23002) referral can be dispensed with subject to various safeguards being met. They apply to taxpaying cases where the sale occurs whilst our file is open and the share to be valued is the whole (there is a separate instruction regarding fractional shares of joint property at IHTM23184). These instructions do not apply where a binding contract for sale was entered into before the death (IHTM23186).
Sales of property, both before and after the VOA have considered the valuation offered by the taxpayer, can be problematic. If there are any problems in this area, please consult your Team Leader in Compliance or refer to Service Technical Support. Subject to this, cases where the taxpayer informs you of a sale should generally be dealt with as follows:
Where the sale occurs after death but before the VOA referral
If the sale is under a Housing Association/Sheltered Housing Scheme (IHTM23181) you should follow the appropriate instructions.
Where the IHT405 indicates that a sale has taken place and that the taxpayer is willing to adopt the gross sale price as the date of death value, there is no need to refer the matter to the VOA. However, this is subject to establishing with the taxpayer that the sale was for full consideration (IHTM28382) and was not made to a ‘connected person’ (IHTM04164).
Where the IHT405 indicates that sale contracts have been or are about to be exchanged, and the taxpayer is willing to adopt the gross sale price, dispense with the VOA referral. This is subject to the safeguards above, and providing the sale is completed within a reasonable period of receipt of the HMRC Account (say two months maximum). In this situation, please keep in regular contact (preferably by telephone) with the taxpayer about progress. If a problem about the timing of sale emerges, it will be important not to unduly delay any necessary VOA referral. (The short timescale quoted reflects the market conditions of recent years, during which values have been quite volatile.)
If the sale notification is received while the VOA is considering the value
It is possible that the...
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