Sale of shares relief ― principles

If shares are sold in the year following death at an overall loss, relief may be available by substituting the sale price of the sold shares for their death values, thus generating a repayment of inheritance tax. The sale must take place by the appropriate person (see below).

The basic conditions for claiming the relief are summarised as follows. Each condition is discussed further below:

1. •

   the shares sold must be ‘qualifying investments’

2. •

   the sales must occur within 12 months of death

3. •

   the shares must be sold by the ‘appropriate person’

4. •

   there must be an overall loss on the sales of the qualifying investments

IHTA 1984, s 179(1)

This relief does not apply to shares transferred in the deceased’s lifetime, but