FACET procedures: capital payments
If any ‘capital payments’ were received on sold ‘qualifying investments’ (IHTM34131) between the date of death and the date of sale, question 3(b) on page 4 of the form IHT 35 should be ticked ‘Yes’. Details of any capital payments should also be included with the IHT 35.
Examples of capital payments include where a rights issue (IHTM34104) is declared and either
- the ‘appropriate person’ (IHTM34161) sells the rights, or
- the appropriate person does not take up or sell the rights and a payment is made for lapsed rights (IHTM34190). (Information about sums paid for lapsed rights will be in the Extel CGT Service), or, where there is an exchange and the appropriate person receives shares and a cash balance.
You should check that the proceeds from the sale of the rights, the sums paid for lapsed rights or any other capital payments are included in the gross proceeds of sale in column B of the IHT 35. If not, you will need to amend the IHT 35 and recalculate the loss.
There is an example that shows how proceeds from the sale of rights are brought into account at (IHTM34188).
If there is any doubt about whether the appropriate person purchased, sold or accepted for lapsed rights you should ask the caseworker to check what option was taken up.