Readers’ forum: Dealing with overage rights on a post-death sale

I am dealing with the estate of a wealthy individual who owned a significant parcel of land. The personal representatives are negotiating for the sale of the land and are contemplating entering into a contract under which they retain the overage rights in the event of a future increase in the value of the land due to development rights being obtained.

The issue which concerns me is the valuation of the land. Do I need to account for the value of the overage rights in determining the value of the estate and if so what it the basis of valuation – will the personal representatives have to undertake a Marren v Ingles type valuation?

There is a possibility that the PRs could make a claim for IHT loss relief depending on the value of the overage rights. It could be many years (if at all) before it is known...