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HMRC internal manual

Shares and Assets Valuation Manual

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HM Revenue & Customs
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Inheritance Tax: VAL70 (Lifetime)

Section 1 shows the shares subject to the present transfer. If the transfer was made to more than one transferee or more than one transfer was involved, the separate parcels of shares transferred and the order in which the transfers were made (if known) will be shown. If the transfers were made on the same day, the order in which they are taken for IHT purposes may, in certain circumstances, affect the value transferred and the provisions of s.266(1) IHTA 1984 should be kept in mind. Whether the value offered is for the holding or represents the value transferred will also be indicated in the appropriate box in the heading.

Section 2 shows the retained shareholdings.

Section 4 indicates the reliefs claimed by the agents. If a particular relief has not been claimed on the whole of the value transferred, details should be shown in Section 11 below.

Availability of business relief, agricultural relief, instalments and interest relief must be considered in all cases at an early stage, whether the relief has been claimed or not. See Chapter 111 of this manual SVM111000 for Business Relief and Chapter 112 of this manual for Agricultural Relief SVM112000.

Section 4, besides indicating whether BR/AR and instalments are claimed, should state the amount of annual exemption (‘AE’) available against the present transfer of value.

Section 5 will include information relevant to BR claims (if appropriate).

Section 7 For events before 22 March 2006 this section asks if the transfer is one out of a trust in which the transferor had an interest in possession immediately before the transfer - for example a release of a life interest by the life tenant. The answer will always be ‘no’ unless the gift is out of settled property in which the transferor had an interest in possession before the transfer. For events after 22 March 2006 and a ‘yes’ answer has been given, valuers should consult the Inheritance Tax manual at IHTM16061 onwards for guidance on the IHT treatment of beneficial interests in possession, where the interest arose on or after 22 March 2006.

Section 8 has three boxes. These are for details of the aggregate chargeable transfers, the taxable limit and the contribution of the present chargeable transfer to the aggregate chargeable transfer figure.

Where the transferor has died, the ‘aggregate chargeable transfers’ will be the aggregate transfers chargeable at the death (for example failed PETS £100,000, chargeable death estate £400,000; therefore, aggregate chargeable transfers £500,000) and the ‘taxable limit’ will be the threshold at the date of death.

Where the transferor is alive and the transfer is one which is chargeable when made, aggregate chargeable transfers will include the chargeable value of the present chargeable transfer plus the value of chargeable transfers (not PETs) made within the previous 7 years - and the taxable limit will be the threshold at the date of the present transfer.

The third box at Section 8 asks for the net contribution of the present chargeable transfer to the aggregate chargeable transfers figure. This means the present chargeable transfer in so far as it relates to the shares. If 100% BR is claimed, the figure will be nil. If no BR is due and if the value of the transferred shares is included in the IHT 100 Account at £20,000 and £3,000 AE is available, the net figure in the third box will be £17,000. [This would still be the appropriate figure, even if cash and quoted investments worth, say, £300,000 were transferred at the same time.]

Section 9 shows whether any valuation or other relevant information has been supplied by the parties.

Section 10 In addition where there have been transfers of shares by the same transferor in other companies, made at any time, this Section will give the company names and CRNs if known. Where other valuations are still in progress, the present valuation will normally be divided to the same valuer as a multi case, in the interests of cost-effectiveness and customer service. If this is not done, the matter should be referred to the Team Leader to consider whether re-allocation is needed. The multi procedure also applies to Death and Settlement references.

Section 11 lists any other information or special instructions sent.

  Additional Guidance: SVM150000