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HMRC internal manual

Inheritance Tax Manual

Transfers and other events on or after 17 March 1987: unquoted shares

For tax attributable to unquoted shares or securities, instalments are available only if the shares or securities remained unquoted (IHTM30216) throughout the period from the date of the chargeable transfer to the death of the transferor (or earlier death of the transferee) inclusive.

Example

A gives B shares in Y Ltd, an unquoted company. By the time of A’s death four years later in 2001 the company’s shares are listed on a recognised stock exchange. B still owns the shares.

Though the condition in IHTA84/S227 (1C)(a) is satisfied, the additional condition for gifts of unquoted shares is not, so instalments are not available.Note that, unlike Business Relief (

IHTM25131), there is no retrospective provision for the tax charge (or further charge) on a death on or after 10 March 1992 in respect of a lifetime transfer before that date.

Example

In 1989 A gives B a 15 % interest in the equity of Y Ltd, an unquoted company. From July 1991 the shares are dealt in on the USM. At A’s death in January 1994 B still owns the gifted shares.

The condition in IHTA84/S227 (1C)(a) is satisfied but not the further condition for unquoted shares in IHTA84/S227 (1A) and IHTA84/S228 (3A). Though the gifted shares were unquoted at the dates of gift and death, they were quoted from July 1991 to March 1992. Accordingly

* they were not unquoted throughout the period from the gift to the death

and

* instalments are not available (contrast the position for Business Relief).