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% agricultural relief (AR) or business relief (BR) claims on unquoted shares. (IHTM18131)

Take particular care with disposals of shares before the first ten-year anniversary 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.   

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

• But the rate for proportionate exit charge is 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.