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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: s.268 IHTA 1984 - Associated Operations

Section 268 IHTA - for details, see Chapter 14 of the Inheritance Tax Manual IHTM14821 - provides that a composite transfer of value may be affected by a series of “operations”. For example A gives 300 (out of his 1000 shares: ISC 1000 shares) to Mrs A, on condition that she gives them to their son. A then gives 300 shares to the son, and so does Mrs A. Under s.268 IHTA, these transactions can be treated as constituting a gift of 600 shares by A to the son.

If you become aware of such a transaction, you should consult the IHT caseworker as to whether the associated operations provisions have been brought into play, and, if so, with what effect on SAV’s valuation requirements.

  Additional Guidance: SVM150000