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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: specific lifetime reliefs: shares and securities: payment of calls

If the transferee (or their spouse or civil partner (IHTM11032)) becomes liable to pay a call in respect of shares transferred, reduce the market value at the date of death or sale by the amount paid.


Jacques transfers 2,000 shares (partly paid) in DEF Plc to his daughter Amelie on 1 August 2012. The shares were valued at £10,000 on that date. Amelie then had to pay the second instalment on the shares (£5,000) on 15 November 2012. On 10 March 2013 Amelie sold the shares for £12,000. Jacques died on 1 January 2014 and Inheritance Tax (IHT) is payable on the gift of the shares.

For fall in value relief you must reduce the sale price of the shares (£12,000) by the amount of the call paid by Amelie (£5,000) to give a value at the sale of £7,000. The fall in value is £3,000.