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HMRC internal manual

Inheritance Tax Manual

Calculating the loss: interest on government securities

Securities marked ‘1k’

Where Government securities are marked ‘1k’ (IHTM18000)the date of death value of the holding for IHT purposes is the bargain price plus thegross accrued interest. This is the date of death value for the purposes of this relief.

Interest accrued at the date of sale must also be included in the gross sale proceeds.

Securities marked ‘1k-xd’

Where a security is marked ‘1k-xd’ (IHTM18000) themarket price is the amount payable less an amount equal to the gross interest accruingfrom the date the bargain was done to the interest payment date. This is the date of deathvalue for the purposes of this relief.

For securities marked ‘1k-xd’ at the date of sale, the gross proceeds of saleshould be calculated in the same way.