IHTM34071 - PC&S/Compliance Group procedures: what to do once the relief is agreed

When the loss on the sale of shares is agreed (either as claimed or after amendment) you will need to amend the estate on COMPASS by entering the allowable loss as a relief. You should also consider if it is appropriate at this stage to repay tax (IHTM31600) that is overpaid. In general you should look to make a repayment unless box 2 on page 4 of the IHT 35 has been ticked. If this box has been ticked you should check the position with the taxpayer or agent and ask whether they wish to receive an interim repayment. Any repayment should be made payable to those named on page 4 of form IHT 35.

The relief will only be final if one of the following apply

• the claim was made at least 14 months after the date of death
• all the ‘qualifying investments’ ( IHTM34131) at any title have been sold and two months have elapsed since the last sale, or
• if only some of the qualifying investments have been sold, you have been told by the taxpayer or agent that all the unsold qualifying investments have been transferred to beneficiaries, or
• box 1 on page 4 of the IHT 35 has been ticked.

If none of the above apply, you can only allow the relief on a provisional basis. The next page ( IHTM34072) tells you what you can and cannot do when the relief is provisional.

If the relief has been allowed on a provisional basis you will need to explain this to the taxpayers or agent.