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You can take the restriction or fetter into account to the extent that consideration in money or money鈥檚 worth was given for it, IHTA84/S163 (1)(a).

The allowance given for the restriction is proportionate rather than a straightforward deduction of the consideration given.

Example

A grants B an option to purchase Blackacre on A鈥檚 death for 拢40,000. B pays拢10,000 for the option. The market value of the option at that time was 拢30,000.

A dies. Blackacre is then worth 拢100,000 on the open market but only 拢40,000 with the fetter.

As partial consideration was given for the option, the fetter cannot be completely ignored. A proportionate allowance for the fetter is given against the difference between the open market value and the restricted value of Blackacre at the date of death.

听

(拢10,000 梅 拢30,000) x (拢100,000 - 拢40,000)= 拢20,000

The value of Blackacre on A鈥檚 death is therefore 拢100,000 - 拢20,000 = 拢80,000.