| Commentary

269 Liability to inheritance tax

| Commentary

(d) Inheritance tax

269 Liability to inheritance tax

Where there is an imbalance as between shareholders in the value received in respect of each share under a scheme of reconstruction, particularly a demerger, and the transferring company is a close company, there may be a chargeable transfer for the purposes of inheritance tax1. This is because any alteration in a close company’s unquoted share or loan capital or in any rights attached to that capital is treated as a disposition by the participators and a chargeable transfer2. This is in addition to the more general charge

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