From the First Tier Tribunal

Julie Butler FCA is the author of Tax Planning for Farm and Land Diversification ISBN: 0754517691 (1st edition) and ISBN: 0754522180 (2nd edition) and Equine Tax Planning ISBN: 0406966540.

IHT valuations and the related property rule

The normal rule for valuing property for IHT purposes, following a death or indeed other transfer, is that the market value of the property comprised in the transferor’s estate must be ascertained on the basis that it is sold in the open market. Under the principle laid down in Buccleuch v Inland Revenue Comrs [1967] 1 All ER 129 it may have to be assumed that the transferor’s property will have to be lotted in a particularly favourable manner. However, as a general rule, the purposes of the IHT valuation that the transferor’s property would be sold together with other property owned by somebody else so that the combined property would achieve a better overall price. There is one exception to this general rule, and that is where the related property rule in s161 IHT Act 1984 applies: