Trusts and Inheritance Tax

Sale of shares from deceased estate

Produced by Tolley
  • 23 Mar 2022 10:38

The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Sale of shares from deceased estate
  • Sale of shares relief ― principles
  • Qualifying investments
  • Sales within 12 months of death
  • Appropriate person
  • Calculation of the overall loss
  • Sale of shares relief ― claims process
  • Sale of shares relief ― practical points

Sale of shares from deceased estate

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 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 a separate relief may be available. See the Fall in value relief guidance note.

Qualifying investments

Qualifying investments include:

  1. quoted shares and securities (including those quoted on a recognised foreign stock exchange). The shares must be quoted at the date of death

  2. unit trusts

  3. open-ended investment

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