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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Stocks and shares: investments on alternative markets: USM

The Unlisted Securities Market (USM) was opened on 1 November 1980 and was intended by the Stock Exchange to be a regulated replacement for Rule 4.2(a) (IHTM18338).

Despite the name, USM shares were traded on the Stock Exchange and subject to the same regulations.

  • These shares were only “unlisted” in the sense that they have not been admitted to the full listing on the main market.
  • It is best to think of the Stock Exchange as a two tier market, with the USM as a second tier.

The USM did not admit new applicants after December 1994, and ceased trading in December 1996. Companies previously traded on the USM either joined AIM (IHTM18336) or went off market.

The shares had a listing on the SEDOL (IHTM18092) and are usually valued in the same way as listed shares.

Business relief

Shareholdings in USM companies were regarded as “unlisted” for the purposes of business relief (IHTM25131) and instalments (IHTM30191) before 16 March 87 and after 10 March 1992.

For transfers between that time, USM shares were treated as listed and were not allowed relief.