Share loss relief

If qualifying investments (stocks, shares, unit trusts, etc) forming part of a deceased’s estate are sold within 12 months of death, at a value lower than the value at death and on which IHT was paid, a claim can be made for the IHT to be recalculated based on this reduced sale value.

A key point is that if a claim is made, the value of all the qualifying investments sold in the 12 months from death needs to be revisited, not just those sold at a lower value. So, it is important to carefully consider which investments are to be sold in this period and those that could be distributed directly to the beneficiaries. It is worth noting that crypto assets do not presently qualify for this relief.

Land loss relief

A similar relief exists for land and property comprised within a deceased estate subject to IHT which is subsequently sold for a lower value, within three or sometimes four years of death. The relief only applies if the consideration received differs by more than £1,000 or 5% of the IHT value on death, whichever is lower. Although, this relief is unlikely to assist with the majority of estates comprising UK real estate.

Up to 6,000 estates claimed these reliefs in 2019 to 2020, based on the latest available HMRC statistics. Claims can be made within four years from the end of the 12-month period following the death.

Despite references to tax cuts in recent prime ministerial hustings, IHT is not listed in the published policies, so it is unlikely that an IHT tax cut is on the immediate horizon. As such, rising IHT receipts might be here for a while. Executors and personal representatives of estates need to be alert to the prospect of making an IHT overpayment claim where these reliefs may apply.