Qualifying property (PETs): unquoted shares or securities - undue hardship
The conditions are the same as with transfers on death (IHTM30218). There are additional considerations you will need to take into account.
In relation to chargeable transfers made otherwise than on death, IHTA84/S228 (1)(c) imports the assumption that the shares or securities will be retained by the persons liable to pay the tax.
Claims of undue hardship have been received in contrived situations, for example:
- John makes a transfer consisting only of unquoted shares
- the transfer is to a settlement which provides that the shares are charged with the tax payable on the transfer
- the trustees claim undue hardship on the grounds that they have no other resources and they are assumed in IHTA84/S228 (1)(c) to retain the shares or securities.
The problem, although seen mainly in connection with lifetime transfers (IHTM14001), may not surface until the death of John. Any case in which the taxpayers claim seems acceptable or on the other hand where they persist despite refusal of their claim should be referred to your manager.