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HMRC internal manual

Venture Capital Schemes Manual

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HM Revenue & Customs
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Share Loss Relief: individual and corporate claimants: individual claimants: more complex cases: inherited shares

The general rule for TCGA purposes is that when a person dies they do not dispose of their assets, but those assets are acquired by their personal representatives. Furthermore, when a person acquires assets as a legatee, they are treated as if their acquisition is the same as the personal representatives’ acquisition. (This is at TCGA92/S62, for guidance see CG30730+).

So a person who inherited shares acquired them other than by means of subscription, therefore they cannot claim Share Loss Relief in respect of any loss on disposal of those shares. (Under the TCGA, they are treated as having acquired the shares at market value at the time of death, so in practice any allowable loss for TCGA may be modest if the shares lost most or all of their value before that time.)