SVM108320 | Inheritance Tax: Revaluation of Property Following a Sale within 3 Years of a Death - section 176 IHTA 1984

Section 176 Inheritance Tax Act (IHTA) 1984 provides relief where, for example, the personal representatives sell the deceased’s shareholding on its own when it had been valued on death as part of a larger holding, because of, say, the related property provisions. Such claims are rarely met in practice and further context is provided by IHTM09751.

Where a claim for revaluation is made under section 176 IHTA 1984, the valuer will need to consider the shares sold, the date of sale, the gross price realised, whether related or non-vested property has also been sold and if so details of that sale. The valuer may also need to consider whether the sale meets the requirement in section 176(3)(b) IHTA 1984 that it was at arm's length for a price freely negotiated at the time of the sale.

Valuers should consider whether any other sale has taken place of shares which were part of the deceased's 'estate' immediately before the death or which then constituted related property. Should it appear that such a transaction has taken place, there may be a need to establish whether the 'qualifying sale' was made in conjunction with the other sale. See IHTM09757 for more detail.

Additional Guidance: SVM150000