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HMRC internal manual

Inheritance Tax Manual

Qualifying investments: Unlisted Securities Market (USM) shares

USM shares qualify for loss on sale of shares relief for deaths between 17 March 1987 and December 1996 when the USM market closed.

But from 10 March 1992 the position is slightly complicated because from this date USM shares may also qualify for business relief (BR) (IHTM26000). This affects the way that we calculate the date of death value. In our view if the USM shares qualify for business relief (BR)

  • their value on death is reduced by any BR, but
  • the sale value is calculated in the normal way.This is based on the wording of IHTA84/S179 (1). Section 179 (1)(a) refers to the ‘value for the purpose of tax’ (that is, the value as reduced by BR) whereas S179 (1)(b) refers to ‘the values of those investments at the time they were …sold’.

This means that a potential loss on the sale of a USM might actually be a gain for the purposes of this relief as in the example below.


Deceased died in 1994. USM shares valued at £5 at date of death but qualify for BR at 50%. They are sold within the year for £4.

The ‘value at death’ is £2.50 per share. Therefore there is a gain of £1.50 per share to be taken into account in calculating the ‘overall loss’.