IHTM33082 - Loss on sale of land: sales excluded from relief: examples of qualifying and non-qualifying sales
IHTA84/S191 (3) denies relief where a sale is to a person (or to the spouse, civil partner, child or remoter issue of a person):
- who has been beneficially entitled to,
- or has had an interest in possession in
- the property comprising the interest sold, at any time between the date of death or sale, The word 바카라 사이트˜comprising바카라 사이트™ is used here to mean 바카라 사이트˜including바카라 사이트™ or 바카라 사이트˜made up of바카라 사이트™. So, the interest sold must be the same as the beneficiary바카라 사이트™s original interest for the relief to be denied. For example, James is left a quarter share of a house under his mother바카라 사이트™s Will. He then purchases a quarter share from the executors but does not receive the bequested share. This leaves him owning only a quarter share interest in the property. In this case the relief will be denied as James is still left with his original interest. Care must be taken as the relief will apply if the purchaser바카라 사이트™s entitlement was less than the interest sold. For example, Lisa is entitled to a half share in her brother바카라 사이트™s house under his Will and she subsequently purchases the whole house. The sale was of the whole property to a beneficiary who was entitled to only a half share of the property.
Example 1
A house is left to Angela, Brian and Carol. Angela buys the house from the executors. The property 바카라 사이트˜comprising바카라 사이트™ the interest sold is the whole house. Angela바카라 사이트™s beneficial interest was in a one third share only. Her beneficial entitlement was included in the interest sold but was not the interest sold, which was the whole. As a result the sale qualifies for relief.
Example 2
A house is left to Aarif and Basheera. Basheera바카라 사이트™s half share of the house is sold to Aarif바카라 사이트™s son. The relief is allowable because the sale is to the child of a beneficiary of a different share.
Example 3
A house is left to Chandra as sole beneficiary. The house is sold to Chandra바카라 사이트™s daughter. IHTA84/S191 (3) (a)(ii) will prevent the relief from applying, as the sale is of the same interest (the whole) to the child of the original beneficiary of the interest.
This is an area that can be complicated. Any case where you are not sure if the relief should be allowed or denied should be referred to Technical. If relief is available, it should be allowed in full. The relief should not be split pro-rata and restricted to reflect the interest of any original beneficiary바카라 사이트™s share. For example, if a whole house is sold for £70,000 (valued at death at £100,000) to a person who had an interest in a one third share as a beneficiary, the relief allowable would be £30,000. Any cases which cause difficulty should be referred to Technical.
In cases where the relief is due you should make sure that the agreed sale price is the best consideration available (IHTM33072) for the property at the date of the sale. Â