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HMRC internal manual

Shares and Assets Valuation Manual

From
HM Revenue & Customs
Updated
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Inheritance Tax: VAL70 (Death)

Section 1 applies as for VAL 70 (Lifetime). See this chapter SVM108030.

Section 2 will show any shares which are known to be part of the estate but which are not taxable on the death. These shares should be taken into account in determining the size of the holding to be valued, even though part of that holding (the part in Section 2) is exempt. Section 2 will also include shares in which the deceased had an interest in possession in settled property which was subject to Estate Duty on the death of his/her spouse (paragraph 2, Schedule 6 Inheritance Taxes Act) or civil partner. Even though such shares are not taxable themselves, they will be taken into account in valuing the shares which are taxable on the death.

Section 3 will show details of any holdings of shares or securities in the company which the IHT caseworker knows to have been held by the spouse/civil partner. If no shares are shown but the deceased is shown as having a spouse/civil partner, you should investigate whether the spouse/civil partner had shares or securities in the company. Any shares or securities owned by the spouse/civil partner have to be taken into account as related property in determining the size of the holding to be valued - s.161 IHTA - though, as with exempt shares, the spouse’s/civil partner’s shares are not themselves subject to tax on the death.

Section 4 applies as for the Val 70 (Lifetime).

Section 5 gives information relevant to BR claims (if known). In other words whether

* The shares had been held throughout the two years up to death
* They were subject to a binding contract for sale at the date of death
* Any order to wind up the company had been made or
* If the company was in liquidation at the date of death

Sections 6 and 7 show sums due to or from the company. ‘Nature of debt’ means ‘loan account’, ‘unpaid dividend’ and so on.

Section 8 shows if this valuation is the only outstanding matter on file.

Section 9 shows the aggregate chargeable transfers (in other words the taxable value of the death estate plus the taxable value of lifetime transfers made within 7 years of the death). This section also shows the chargeable threshold at the date of death, in other words whether the case is taxpaying on present figures. If 100% BR has been claimed for the shares, the amount reflected for them in the ‘Aggregate Chargeable Transfers’ figure will, of course, be nil.

Section 10 shows if a valuation or any other relevant documentation has been supplied by the parties.

Section 11 gives other SAV references if this case is a ‘multi case’ where the deceased held shares in more than one unquoted company.

Section 12 shows any other relevant information disclosed in the IHT Account.

  Additional Guidance: SVM150000