Commentary

I4.320 Loss on sale of land — example

IHT, trusts and estates

I4.320 Loss on sale of land — example

I4.320 Loss on sale of land — example

Example — sale to beneficiary

E died leaving an estate which included three houses, Foxholes, Oakfield and Pinewood, valued at £400,000, £500,000 and £600,000, respectively.

The executors sold within three years of the death Foxholes for £300,000 and Oakfield for £550,000.

Pinewood was sold to a beneficiary for £600,000, when its market value was £630,000. The executors claimed relief.

The figures are:

PropertyValue on deathSale priceDifference
£££
Foxholes400,000300,000(100,000)
Oakfield500,000550,00050,000
900,000850,000(50,000)
Pinewood600,000630,00030,000

The denominator of the appropriate fraction is £100,000+£50,000=£150,000 (it does not include the £30,000 difference on the sale of Pinewood,

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