The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
Where land is sold from a deceased estate for less than the taxable amount at date of death, relief for the loss is granted by replacing the probate value with the later sale value in the calculation of inheritance tax.
In a typical case, where the only interest in land is the deceased’s residence which his executors sell to an unconnected person for less than its probate value, the claim should be straightforward. The lower sale price is substituted for the death value and following a recalculation, a tax repayment is made to the executors. The claims process is considered below.
However, the rules for claiming sale of land relief can be complex and can produce disadvantageous results where there are other sales and purchases or where the property sold has changed in some way.
Broadly, the provisions are that the ‘sale value’ will be substituted for the ‘value on the death’ and the inheritance tax position re-calculated, if the following conditions are met:
a claim is made by the ‘appropriate person’ who
has sold ‘an interest in land’ included in a deceased’s estate
within four years of death (which may be extended in the case of compulsory purchases)
for a consideration lower than its death value
IHTA 1984, s 191
HMRC has confirmed that it will not accept a claim to substitute a higher sale price for the date of death value, even though the legislation impl
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
The basic rule is that all benefits provided to an employee by reason of their employment are taxable unless there is a specific exemption or other rule that means they are not chargeable to tax.ExemptionsThe main exemptions for employee benefits are in ITEPA 2003, ss 227–326B (Pt 4).Below is an
Maintenance payments are payments made by a taxpayer to their former or separated spouse for the maintenance of that former spouse or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the payments must be made by virtue
Preparatory workBefore completing the Inheritance Tax account for submission to HMRC, the practitioner needs to undertake a comprehensive review of the extent of the estate and its proposed distribution. The work required leading up to the submission of the account is described in detail in the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.