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HMRC internal manual

Inheritance Tax Manual

Calculating the loss: call

If the ‘appropriate person’ (IHTM34161) has to make a post-death payment - a ‘call’ - to a company in respect of ‘qualifying investments’ (IHTM34131) that are subsequently sold then the payment is treated as increasing the date of death value of that investment for the purposes of the relief, IHTA84/S182.

Example

The deceased died in June 1998 owning 1,000 BP shares (partly paid) worth £1,600. The executor paid the second instalment on the shares (£1,050) that was due on 30 August 1998. The whole holding was subsequently sold for £2,200 within 12 months.

The total value on death for the purposes of this relief is now £2,650.

The loss on sale will be £450.

If the appropriate person(s) paid any call, question 3(c) on form IHT 35 should be ticked ‘Yes’ and details of the call should be provided. FACET also carry out checks for omitted calls (IHTM34090).

Payments made in connection with taking up a rights issue (IHTM34187) increase the date of death value in a similar way to call.