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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Qualifying investments: what are qualifying investments?

‘Qualifying investments’ are

  • shares or securities which at the date of death were quoted
  • holdings in authorised unit trusts, as defined in ICTA88/S468
  • open ended investment companies (OEIC) (IHTM34141)
  • shares held in a common investment fund established under s.42 Administration of Justice Act 1982 that form part of the death estate, IHTA84/S178

Quoted holdings include shares on the London Stock Exchange and shares quoted on recognised foreign stock exchanges (IHTM34140). Shares quoted on NASDAQ (National Association of Securities Dealers Automated Quotations) also qualify for relief if the date of death was on or after 10 March 1992.

Shares traded on the Unlisted Securities Market (USM) qualify for relief for deaths after 17 March 1987. But from 10 March 1992 there are special rules (IHTM34133) that apply to calculating the loss on USM shares.

You will only rarely come across common investment funds. They relate to funds in Court that are administered by the Public Trustee and are comparable to unit trusts. The value of a share in one of them is determined by the total value of the underlying securities at the relevant time.