Calculating the loss: call
A call is a payment that the shareholder has to pay the company at a future date. If
- the appropriate person (IHTM34161) has to make a post-death payment (a call) to a company in respect of qualifying investments (IHTM34131) and
- those investments are later sold
then the payment is treated as increasing the date of death value of that investment for the purposes of the relief, IHTA84/S182.
Elsie died in June 2014. She owned 1,000 BP shares (partly paid) worth £1,600. The legal personal representative paid the second instalment on the shares (£1,050) that was due on 30 August 2014. 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 persons paid any call, question 5 on form IHT 35 should be ticked Yes and details of the call should be provided.
Payments made in connection with taking up a rights issue (IHTM34187) increase the date of death value in a similar way to call.