Coronavirus – implications for UK Inheritance Tax Relief
Last updated 17 April 2020
The Personal Representatives of an estate can reclaim IHT in some circumstances where there are losses to the estate. Relief can be claimed when qualifying investments and land are sold for less than their value submitted for probate purposes within the permitted time limits.
Qualifying investments are quoted shares, securities and unit trusts sold within 12 months of the date of death.
In light of the current Coronavirus crisis, if an estate has a share portfolio which has fallen in value since the date of death, it may be beneficial for the executors to sell the shares now, realise the losses, and secure an IHT repayment. In order for an IHT repayment to be due, there must be an overall loss on the sales of qualifying investments, taking account of all those sold in the relevant 12 month period and not just those that have fallen in value.
IHT relief can also be claimed on land which is sold for less than its probate value within 4 years of the date of death.
The IHT saving as a result of triggering any losses now will need to be weighed up against the potential for longer-term investment growth. Each case will be different and specialist advice should be sought.
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