Q&As

Are there any IHT implications where a testator grants an option to sell land on the death of the survivor of himself and their partner at an agreed price, but at the date of death the market value is more than the option price?

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Published on LexisPSL on 03/03/2017

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • Are there any IHT implications where a testator grants an option to sell land on the death of the survivor of himself and their partner at an agreed price, but at the date of death the market value is more than the option price?
  • Inheritance tax
  • Restrictions on transfer (s 163 IHTA 1984)
  • Example

In answering this Q&A our research has been limited to cover only the IHT implications for the estate of the grantor of the option.

Inheritance tax

Inheritance tax (IHT) is a tax on a transfer of value. The value is the loss to the transferor's estate. (Inheritance Act 1984 (IHTA 1984), s4(1)).

The general rule under IHTA 1984, s 160 is that property in the estate is valued for IHT purposes as:

  1. the price that the property might reasonably be expected to fetch if sold in the open market at that time provided

  2. that price is not assumed to be reduced on the ground that the whole property is placed on the market at the same time

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