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This guidance note discusses the principles of valuation that apply to the valuation of property for IHT purposes. It covers the general valuation rules, the loss to the donor principle and the related property rules in detail. It also discusses property where a special valuation rule applies including common types of property such as quoted and unquoted shares and land.

Where an inheritance tax (IHT) liability arises, it is computed by reference to the value of the property ‘transferred’. On the occasion of death, the whole of the deceased’s estate is deemed to have been transferred immediately before death.

This is the aggregate of all the property owned at that time. There are two key considerations when determining the value on which tax is charged:

1. •

   the first consideration is the standalone value of distinct items of property

2. •

   the second consideration is whether the value of individual assets must be determined in relation to other assets