Commentary

I4.307 Loss on sale of shares — changes in a holding between death and sale

IHT, trusts and estates

I4.307 Loss on sale of shares — changes in a holding between death and sale

I4.307 Loss on sale of shares — changes in a holding between death and sale

Certain events and transactions which alter a holding are treated as altering the original holdings and not as disposals of the original holding.

There are special rules1 for the calculation of the value on death in any case where, within the period of 12 months immediately following the date of the death in question, there occurs in relation to any qualifying investments (see I4.301A for the meaning of this term) comprised in the deceased's estate immediately before his death ('the original holding') any of the following events, being transactions to which TCGA 1992, s 127 applies.

  1.  

    (a)     any reduction in the share capital of a company

  2.  

    (b)     any reorganisation of the share capital of a company, including:

    1.  

      –     any case where persons are, whether for payment or not, allotted shares in or debentures of the company in respect of and in proportion to (or as nearly as may be in proportion to) their original shareholdings, and

    2.  

      –     any case where there are more than one class of shares and the rights attached to shares of any class are altered

  3.  

    (c)     any conversion of securities (for example loan stock or a similar security, whether secured or not2), including:

    1.  

      –     a conversion of securities of a company into shares in the company

    2.  

      –     a conversion at the option of the holder of the securities converted as an alternative to the redemption of those securities for cash

    3.  

      –     any

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial