Commentary

I5.229 Close companies—transfers of value for QIIPs

IHT, trusts and estates

I5.229 Close companies—transfers of value for QIIPs

I5.229 Close companies—transfers of value for QIIPs

The main discussion of close company transfers is in Division I6.1, and this is a short summary of the provisions concerning actual or deemed transfers by close companies which affect settlements with an interest in possession. For the definitions of close company and participator, see I6.102. These definitions are similar to the corporation tax definitions, with some modifications.

QIIP consists of close company shares

The legislation1 caters for the situation where shares in a close company are part of settled property subject to a qualifying interest in possession (QIIP) and the close company makes an (actual) transfer of value, ie diminishing the value of its assets or giving them away.

This transfer is apportioned among the participators according to their respective rights and interests in the company2, and there will be a deemed transfer of value for IHT purposes as

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