Commentary

I12.502 Transfers of shares in family companies

IHT, trusts and estates

I12.502 Transfers of shares in family companies

I12.502 Transfers of shares in family companies

The comments in this article—and the example below—are only of relevance where the values are not relieved in full by 100% business property relief. Where relief is available at 100% the transfer is (subject to clawback) IHT neutral.

The prudent donor will have estimated the value he is contemplating transferring particularly when the transfer crosses one of the valuation barriers (see below). He will also have regard to the related property rules. Although no IHT is immediately payable if the gift is to be in potentially exempt transfer form, it is still prudent—if not essential—to quantify the amount of risk. Where appropriate, insurance against the tax payable should the donor die within the seven year period should be obtained and the policy written into trust for the donee, so that it falls outside of the donor's estate.

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