Inheritance Tax Act 1984 section 193

Changes between death and sale

Section 193 deals with adjustments that must be made to the sale price of an interest in land when changes have occurred to the interest or the underlying land between the date of death and the date of sale.

• Where the interest or the land has changed between the date of death and the date of sale, the interest must be revalued at the date of death assuming the changed circumstances had applied before death, and an addition is made to the sale price equal to any shortfall between the original and revised death values.
• If the revised death value is greater than the original death value (for example, because repairs have improved the property), the sale price is reduced to what it would have been had the changes not occurred.
• Where statutory compensation becomes payable between the date of death and the date of sale — for example, because a restriction is imposed on the use or development of the land — the restriction or other cause is ignored for the revaluation, but the compensation amount is added to the sale price instead.
• The adjustments ensure that the relief claim is based on a like-for-like comparison, so that falls in value caused by changes to the interest or land (rather than by market movements) do not inflate the relief, and improvements do not reduce it unfairly.