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HMRC internal manual

Shares and Assets Valuation Manual

From
HM Revenue & Customs
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Inheritance Tax: Bequests of an Unspecified Number of Shares

Where a death estate is partially exempt, and the will provides for the number of unquoted shares taken by non-exempt beneficiaries to be determined by reference to the value placed on them, you should consult the IHT caseworker as to what our approach should be. Shares and Assets Valuation (SAV) would not generally wish to be involved in a valuation if this could not affect the amount of tax payable. On the other hand, if shares are appropriated at a very low value in satisfaction of a legacy linked to the IHT threshold, the market value of the shares might be far in excess of the nominal amount of the legacy. Where 100% BR is in point, of course, there will be no need to agree a value. Moreover, the net value of the shares (after reliefs) will be nil and will thus not have any effect on the amount payable under the pecuniary legacy.

A typical example is a bequest of such number of shares as, after agreement with SAV, will keep the taxable estate under the tax threshold. Such instances are, however, much less common than in the days when 100% BR was not available.
 

  Additional Guidance: SVM150000