Commentary

I8.243 Spouses and civil partners

IHT, trusts and estates

I8.243 Spouses and civil partners

I8.243 Spouses and civil partners

One purpose of the related property provisions is to prevent a husband and wife, or civil partners, who control a private family company from giving away small slices of the shares at minority values and thus avoiding IHT on the value of the control element in the combined holdings. The intention is not fully achieved in practice, because where shares are transferred in small parcels there is still some loss of chargeable value overall. It is generally beneficial for the spouse or civil partner holding the least number of shares to make the first transfer and cross the 50% threshold. This is because only the shares of the spouse or civil partner making the first gift will be charged to IHT on the control value, the shares of the other spouse or civil partner being charged on a minority value on any subsequent transfer. The related property rules take into account related property in determining the taxable value of property subject to an

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