IHTM42660 - Discretionary trusts: unquoted shares

It is important that you refer to SAV in all cases where there may be tax at stake. Use form Val70. ( IHTM18151)

• (There is a separate form, Val72, for informal queries when risk assessing potential Future Claims cases)

100% relief

Refer all 100% AR or BR claims on unquoted shares. ( IHTM18203)

Take particular care with disposals of shares before the first TYA which no longer qualify for relief.

• If the shares qualified for 100% relief at set-up then there will have been no chargeable relevant property on which to levy a tax charge and nil tax to pay on that occasion.
• So it may at first appear that there is no rate of tax on the subsequent disposal.
• But the rate for proportionate exit charge is calculated on historic values without the benefit of any reliefs, and on that basis there may be a rate. ( IHTM42114)

This is particularly relevant if shares in a company are floated on the stock exchange and do not then enjoy the benefit of business relief.

Historic values

If you need to obtain a historic value purely for calculating rate, complete section 3 of the Val70. ( IHTM18191)

Delay

The valuation may take some time, so it may be worthwhile reminding the taxpayer to place a suitable amount on deposit.