IHTM42660 - Discretionary trusts: unquoted shares

It is important that you refer to Shares and Assets Valuation (SAV) in all cases where there may be tax at stake.    

Refer all 100% or 50% agricultural relief (AR) or business relief (BR) claims on unquoted shares. (IHTM18131) 

Take particular care with disposals of shares which no longer qualify for relief.    

  • If the shares qualified for 100% relief at set-up then there will have been no chargeable relevant property on which to levy a tax charge and nil tax to pay on that occasion.    

  • Similarly for shares qualifying for relief at the anniversary of the trust if the charge is on or after 6 April 2026. 

  • So, it may at first appear that there is no rate of tax on the subsequent disposal.    

  • However, the rate for exit charges, whether before or between 10-year anniversaries is now calculated on historic values without the benefit of any reliefs and on that basis there may be a rate. (IHTM42114) 

This is particularly relevant if shares in a company are floated on the stock exchange and do not then qualify for BR.  

Historic values  

SAV will also provide advise if you need to obtain a historic value purely for calculating rate.  

Delay  

The valuation may take some time, so it may be worthwhile reminding the taxpayer to place a suitable amount on deposit.