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HMRC internal manual

Inheritance Tax Manual

Lifetime transfers: dating of dispositions: choses in action and incorporeal moveables

Negotiable instruments, such as bearer securities, are transferable by delivery.

A gift of shares which are not bearer is not complete until the transfers have been executed and handed to the donee together with the share certificates (Re Rose [1952] Ch 499). If the donor is in a position to prevent registration in the company’s books the gift is not complete until registration has been effected. Normally it may be assumed that the date of delivery of transfer documents and share certificates is the effective date for transferring the beneficial ownership of shares, but even this has been thrown into doubt following the Court of Appeal’s decision in Pennington v Waine [2002] EWCA Civ 227. All cases of doubt should be referred to Technical.

In Scotland a gift of shares is not normally complete until registration in the books of the company.

Dispositions of other choses in action/incorporeal moveables (Scotland), (IHTM42700) such as insurance policies and copyrights, will be complete when there has been either a declaration of trust (in England) or a transfer or an assignment/assignation as required by the particular subject matter of the gift.

In Scotland, where a person takes their own property in their own name as trustee for another, or purchases property from their own funds and takes it in their own name as trustee for another, this does not complete the trust or the gift without delivery or the equivalent of a delivery.

In Scotland, as regards policies, the assignation must be followed by intimation to the Insurance Company.