Inheritance Tax relief for loss on sale of land (IHT38) explained
This explainer clarifies how to use the IHT38 form to claim relief for loss on sale of land from a deceased person’s estate, with plain-language definitions of terms and practical steps for executors, trustees. Heirs.
What the form does and when to use it
The form IHT38 lets you claim Inheritance Tax relief if you sell land or buildings from a deceased person’s estate for less than its value. This is useful when a sale loses money relative to the value used for tax planning. Updates to the form and translations have been published over several years, including 2026 revisions. In short, use IHT38 if a sale of estate land or buildings results in a loss and you want to adjust the tax relief accordingly.
Key facts you should know
Who can claim: usually the personal representatives handling the estate, or a trustee managing the inherited property. What counts as a loss: selling land or buildings from the estate at a price below the value used for probate or tax purposes. What you submit: information on the sale, the loss amount, and the relationship to the deceased. Why it matters: claiming relief can affect the amount of Inheritance Tax due. The government page for IHT38 has been updated multiple times, including 2026 improvements and Welsh translations.
Who is affected
Executors or administrators of a deceased person’s estate and any beneficiaries with an interest in the land or buildings sold. If you manage a trust holding the property, the trustees may also be involved in submitting the form. The exact status depends on who is legally responsible for the sale and the estate's tax position.
Practical next steps
1) Confirm whether the estate sold land or buildings and incurred a loss relative to the value used for probate or tax purposes. 2) Gather sale details, including dates, sale price, and the original value. 3) Check the latest version of IHT38 on GOV.UK to ensure you use the current form and guidance, noting 2026 updates and translations. 4) If unsure, consult a professional such as a tax adviser or solicitor who specializes in Inheritance Tax. 5) When ready, complete and submit IHT38 as part of the estate’s tax paperwork, including supporting calculations for the loss and relief claimed. 6) Review any subsequent updates from HMRC in case of further changes to the form or guidance after submission.
Limits and questions
The explainer summarizes the official guidance; it does not provide legal advice. For detailed eligibility, check the specific IHT38 guidance and any government updates. If the estate includes Welsh issues or translations, note that Welsh translations are available in updated forms. If a sale is part of a larger estate, consider how the loss interacts with other reliefs and tax positions for an accurate calculation.
Which sources did Setup in Bahrain review?
Setup in Bahrain reviewed the following source material before preparing this explanatory article.
The links remain visible so readers can inspect the evidence, compare dates and context, and confirm current requirements with the relevant authority.
- gov.uk — evidence source reviewed for this article.
Information and responsibility notice: This article is general information based on the cited material available when published. It is not legal, tax, immigration, medical, financial, banking, or investment advice; it does not create a professional-client relationship; and it is not a guarantee of outcome, availability, accuracy, or eligibility. Rules, schedules, prices, and third-party information can change. Confirm material decisions with the relevant authority and an appropriately qualified adviser before acting.