Overage and IHT - what tax implications

Overage and IHT - what tax implications

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As a retiree, former director and non-accountant, the following situation could almost be a question for an accountancy exam paper.

A spinster living nearby passed away, and her house was sold at auction for £400,000 (figure rounded) with an overage of 25%, conditional on a garden plot ever get planning permission to build. Planning had previously been refused on the grounds of back-fill rather that in-fill.

What are the tax implications?

HMRC always demand IHT upfront.

So, how is the potential £100,000 taxed?

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