IHTM34175 - Calculating the loss: call

If the ‘appropriate person’ ( IHTM34161) has to make a post-death payment – a ‘call’ - to a company in respect of ‘qualifying investments’ ( IHTM34131) that are subsequently sold then the payment is treated as increasing the date of death value of that investment for the purposes of the relief, IHTA84/S182.

Example

The deceased died in June 1998 owning 1,000 BP shares (partly paid) worth £1,600. The executor paid the second instalment on the shares (£1,050) that was due on 30 August 1998. The whole holding was subsequently sold for £2,200 within 12 months.

The total value on death for the purposes of this relief is now £2,650.

The loss on sale will be £450.

If the appropriate person(s) paid any call, question 3(c) on form IHT 35 should be ticked ‘Yes’ and details of the call should be provided. FACET ( IHTM01023) also carry out checks for omitted calls ( IHTM34090).

Payments made in connection with taking up a rights issue ( IHTM34187) increase the date of death value in a similar way to call.