IHTM34220 - Restrictions on relief: part holdings comprised in the deceased’s estate

This restriction applies if only part of the holding is included in the deceased’s estate.  The loss on sale, restricted as necessary, is deducted from the value of the entirety of the investments. The resulting figure is then apportioned according to the values of:

• the part of the holding comprised in the estate, and
• the entirety of that holding, IHTA84/S186.

Example

Aries trust fund comprises 1,000 Black plc shares, valued immediately before death at £4,000.  Of this 250 shares with a value of £1,000 is comprised in the deceased’s estate.

Two months after the death the holding is sold for £3,000.  The overall loss on sale is £1,000 and the value of the entirety of the holding after relief becomes £3,000.

The value of that part of the holding comprised in the estate is revised to

(1,000 ÷ 4,000) x £3,000 = £750