IHTM34043 - PC&S/Compliance Group procedures: checking form IHT 35


The table below lists all the checks that you need to make before you can agree the claim to loss on sale of shares relief or refer the IHT 35 to FACET ( IHTM01023). You should try to complete all the checks and, where appropriate, wait for the IHT 35 to be returned from FACET or SAV ( IHTM01110) before raising any enquiries about the claim.


CheckAction
a) Were all the holdings listed in part 1 sold within 12 months of the date of death?Delete any holdings that were sold more than 12 months after the date of death.

You will need to tell the taxpayer or agent why you have done this.( IHTM01081)
b) Does the total at A match the on the form the total value on the IHT411 that was submitted with the IHT400?You should consider why this may be the case. You may find the reasons for this when carrying out the checks at (c) to (e) below. Other reasons for this may include
  • The taxpayers have not sold all the shares (provisional ( IHTM34072) relief only may be appropriate)

  • Sales of PEPs and ISAs may have been omitted.
Also if the deceased had shares as part of an underwriting interest ( IHTM34080) or as part of an interest in an unadministered estate ( IHTM34137), you should consider whether these should be included in the claim. 

If you are concerned that all sales may not have been included you should raise enquiries with the taxpayer or agent.
c) Are all the shares listed in part 1 ‘qualifying investments’ ( IHTM34131)?Delete any that are not qualifying investments.
You will need to tell the taxpayer or agent why you have done this. ( IHTM01081)
d) Are any foreign shares included in part 1?If yes, refer the file to SAV (Foreign) with a memo asking them
  • Whether these shares may be regarded as ‘qualifying investments’ and, if so
  • To advise on the sale price, regardless of the values involved.
e) Go through the shares listed in part 1 and check against the information on your file
  • that the shares have been previously included in the estate
  • the date of death price, and
  • the date of death value of the holding.
Tick the date of death values in pencil to show that they have been checked and are correct. 

You should also check the arithmetic in the sale column.
  • (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
If there are any discrepancies in the date of death values, you will need to ask the ‘appropriate person’ ( IHTM34161) or agent for an explanation.

If there is an error in the arithmetic you will need to correct the figures and tell the taxpayer or agent of the revised loss.
You should watch out for any shares that were marked ex-dividend ( IHTM18000) at death or any accrued interest on stocks.If xd’s have been included in the date of death value they should be deleted and the values recalculated.

Any accrued interest on stocks should be removed if they are not included in column A and column B.
You should check for any Government securities that were originally marked ‘1k’ ( IHTM18000) or ‘1k-xd’ ( IHTM18000) at the date of death and make sure ensure that they have been valued correctly ( IHTM34174) for the purposes of this relief.Amend column A as appropriate.
You should also note any shares that are included in column B and valued at either nil or £1If any shares are included at either nil value in column B you should check ( IHTM34052) with FACET whether the shares were suspended at the 12-month anniversary of the date of death.

If any shares are valued at £1 in column B you should check with FACET whether the shares were cancelled within 12 months of death.

There are separate instructions on how to deal with unsaleable investments ( IHTM34155) and the special rules that apply to suspended ( IHTM34156) or cancelled ( IHTM34157) shares.
f) Complete an arithmetic check of the totals at A, B and CIf they are not correct you will need to tell the taxpayer or agent of the revised loss.
g) Is the question in part 2 of the form or any of the questions in part 3 of the form answered ‘Yes’?

Is the claimed loss substantial? ‘ (This text has been withheld because of exemptions in the Freedom of Information Act 2000)		If the answer to any of these questions is ‘Yes’, you will need to refer ( IHTM34051) the IHT 35 to FACET.

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