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HMRC internal manual

Shares and Assets Valuation Manual

IHT Business Property Relief: Restrictions on relief - introduction

Part V, Chapter 1 of the Inheritance Tax Act 1984 denies relief to property in certain circumstances.

Under s.103(3) unquoted shares or securities in a company will only qualify for relief if the company carries on a business for gain - see this chapter at SVM111110.

Under s.113, property will not qualify for relief if it is subject to a binding contract for sale at the relevant time - see this chapter at SVM111120.

Under s.105(5), shares or securities in a company do not qualify if the company is being wound up or is “otherwise” in process of liquidation - see this chapter at SVM111130.

Under s.105(3), if a company’s business consists wholly or mainly of making or holding investments and so on, shares or securities in it will not qualify for relief - see this chapter at SVM111140 onwards.

Under s.112, relief is denied to the extent that the value of the shares, securities and so on is attributable to excepted assets - see this chapter at SVM111210 onwards.

Under sections 113A and 113B, if there is a PET or chargeable lifetime transfer, the tax or additional tax chargeable on the transferor’s death will be charged on the basis that relief is not due, unless certain additional conditions are satisfied - see this chapter at SVM111260 onwards.

  Additional Guidance: SVM150000