Introduction to this document

IHT fall in value relief for shares checklist

Where a sale or transfer of shares or other qualifying investments is made within one year of death at a value less than they had for probate, inheritance tax (IHT) can be recalculated using the lower value. Use our checklist to make sure you meet the conditions to qualify for the relief.

Make a claim

Executors should revalue qualifying investments before the first anniversary of the deceased’s death and consider selling any standing at a loss.

Note. There is an anti-avoidance rule to stop executors from dumping shares to create a loss, claiming back the IHT and then buying back the same or different shares. This rule applies to purchases made within two months of the last sale.

To calculate the loss, you have to include all the investments sold or transferred within the twelve months since death. That means if you sell some for more than probate value, the profit will reduce the loss on which you can claim the IHT reduction.

Go through the IHT Fall in Value Relief for Shares Checklist before you complete the Form IHT35 to ensure that relief will be available. The claim must be made within four years of the end of the twelve-month period during which qualifying sales can be made.