Inheritance tax share loss relief

Volatility in the markets is nothing new but in recent months we have seen turmoil not just for equities but also less usually for gilts. At such times it is useful to be reminded that our inheritance tax rules allow relief in cases where asset values were higher at the date of someone’s death than when their personal representatives come to sell them. It is only fair that beneficiaries suffer tax on what they actually receive rather than on the value of the assets on a day when they were unable to access them.

A similar relief exists for land sold at a loss after someone’s death but this article focuses on the relief for shares. That extends to gilts too and a wide range of foreign listed shares may not be obviously front of mind when a case arises.

The legislation

Section 4 of...