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Home / Simons-Taxes /IHT, trusts and estates /Part I8 Valuation /Division I8.2 Principles of valuation /Principles of IHT valuation—overview / I8.208 The hypothetical purchaser for IHT
Commentary

I8.208 The hypothetical purchaser for IHT

IHT, trusts and estates

The open market excludes no one1 and should be regarded as open to anyone who is willing and able to make an offer2.

A willing purchaser is a person of reasonable prudence who would not rush into the sale without first obtaining all the relevant facts3, a description which has been approved by the House of Lords4.

HMRC describes a prudent purchaser as one who would not be willing to go beyond a price which, on normal commercial principles, would give an appropriate return for the money — see VOA IIHT manual Practice Note 1 para 9.3.

In the case of domestic property, the return could be either the use of the property, the receiving of income therefrom, the capital sum realised on a sale, or any combination of these.

Case law

The special purchaser

Judicial references to the characteristics of the seller and purchaser have been made to emphasise the objective nature of the valuation. Neither party is to have attributed to him characteristics which

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