Inheritance Tax Act 1984 section 188

Limitation of loss on sale

Section 188 caps the allowable loss on the sale of investments from a deceased's estate, ensuring the loss cannot exceed the original probate value of those investments.

• Where investments are sold at a loss, the relief claimed cannot produce a loss greater than the probate value of those investments.
• If the calculated loss would otherwise exceed the probate value, the sale value is adjusted upwards so that the loss equals the probate value exactly.
• This limitation applies to investments where a call payment has been made after death (as covered by section 182).
• It also applies to investments that have been exchanged or converted into different holdings (as covered by section 183(5)).