| Commentary

62 Inheritance tax

| Commentary

62 Inheritance tax

A charge to inheritance tax may sometimes arise as a result of a company reorganisation. This is the effect of a bundle of provisions contained in Part IV (Sections 94 to 102) of the Inheritance Tax Act 1984 which only apply to close companies1. For example, where a close company makes a transfer of value, the participators are charged to tax in proportion to their holdings as if they had made a transfer of value2. This could cause a problem where as part of a reorganisation the company is transferring assets or shares at an undervalue. Where

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