188体育

If the change has the effect of reducing the value of the transferred land, adjust the relief by increasing the market value of the property at the date of death or sale by the difference between

• the market value of the interest in the land at the time of the transfer, and
• what that value would have been if the change had already taken place.

Example

The market value of land is 拢100,000 at the time of transfer. Between then and the transferor鈥檚 death a lease is granted that reduces the market value (IHTM14626) of the land. If the lease had been in existence at the time of transfer the land would then have been worth 拢60,000. The market value of the land subject to the lease at the date of death is 拢50,000.

For relief purposes you must increase the date of death value of 拢50,000 by the difference between 拢100,000 and 拢60,000 (拢40,000) to become 拢90,000. The amount of relief due is 拢10,000. This is the difference between the actual market value of the land at the transfer date (拢100,000) and the adjusted value of the land at the date of death (拢90,000) under IHTA/S137(1).

Where compensation becomes payable in connection with the reduction in value of the interest in land you must follow the further instructions at IHTM14664.