Inheritance tax loss relief:
PRs may be forced to sell assets because they need cash to meet their debts, tax
liabilities or legacies. Where sold for less than their value at the date of death.
Loss of sale relief can reduce the inheritance tax liability if the estate.
Where ‘qualifying investments’ are sold within 12 months of death for less than
market value at date of death (i.e. probate value) then the sale price may be
substituted for the market value at death and inheritance tax adjusted accordingly
under IHTA 1984 ss178-189.
‘Qualifying investments’ are shares or securities which are quoted on a recognised
stock exchange at the date of death and also holdings in authorised unit trusts.
Relief must be claimed, it is not automatic.
Normally where PR makes sale and not beneficiary.
If PRs claim the relief, the value of the qualifying investments at death must be
reduced for Capital Gains Tax purposes (s187).
This has the effect of preventing the PRs claiming loss for CGT purposes where they
have claimed inheritance tax relief.
PR must report all sales of qualifying investments made within the 12-month period,
above and below death value.
PRs may be forced to sell assets because they need cash to meet their debts, tax
liabilities or legacies. Where sold for less than their value at the date of death.
Loss of sale relief can reduce the inheritance tax liability if the estate.
Where ‘qualifying investments’ are sold within 12 months of death for less than
market value at date of death (i.e. probate value) then the sale price may be
substituted for the market value at death and inheritance tax adjusted accordingly
under IHTA 1984 ss178-189.
‘Qualifying investments’ are shares or securities which are quoted on a recognised
stock exchange at the date of death and also holdings in authorised unit trusts.
Relief must be claimed, it is not automatic.
Normally where PR makes sale and not beneficiary.
If PRs claim the relief, the value of the qualifying investments at death must be
reduced for Capital Gains Tax purposes (s187).
This has the effect of preventing the PRs claiming loss for CGT purposes where they
have claimed inheritance tax relief.
PR must report all sales of qualifying investments made within the 12-month period,
above and below death value.
