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HMRC internal manual

Inheritance Tax Manual

Investigation in 100% relief cases: Introduction

You should investigate 100% business relief if the date of death or transfer was on or after 10 March 1992, and the business interest shown on form IHT412, IHT413 or D38 is

  • a holding of unquoted shares, or
  • the whole business, or
  • an interest in a business.

If it is a holding of unquoted shares, Shares and Assets Valuation (SAV) will consider whether the conditions for 100% relief, including the period of ownership test, are satisfied. In the first instance you should complete form Val 70 and refer it to SAV in the normal way. You should ensure that all information relevant to the shareholding contained in form IHT400 is sent to SAV on the Val 70, or by attaching copies of valuations etc.

If SAV confirms that 100% relief applies, the value of the holding is not ‘ascertained’ (IHTM09241) for Inheritance Tax and cannot be used by the taxpayer as the base value for Capital Gains Tax. When you receive confirmation from SAV that 100% relief applies you should write to the taxpayer (or their agents) on the following lines:

Relief at 100% is available for that part of the value transferred attributable to [state the name of the holding]. Please note that its value has not been ‘ascertained’ within the meaning of s.274 Taxation of Chargeable Gains Act 1992.

In the case of a whole business or an interest in a business, 100% business relief does not apply

  • if the business interest shown on form IHT413 or D38 is land or buildings, plant or machinery used by a partnership business or company (IHTM25221), or
  • if the date of death or transfer was before 10 March 1992.  In this case you should check the detailed rules (IHTM25131) for business relief and the valuation (IHTM25081) of the business interest, or
  • it is a business dealing in securities or stocks and shares, dealing in land and buildings, or making or holding investments (IHTM25261), or
  • there are assets excluded from relief (IHTM25341), or
  • the additional conditions for lifetime transfers are not satisfied (IHTM25361)

If 100% relief does not apply, you should check the valuation of the business interest. If the business interest was an interest in a partnership you should also check the rules for partnerships (IHTM25091) and the valuation (IHTM25101) of the partnership interest.