Where there has been a payment by the ‘appropriate person’ ( IHTM34161) (for example, in respect of call or rights issue) the loss on sale could be greater than the date of death value of the shares. However IHTA84/S188 restricts the relief for loss on sale to the value of the original holding as at the date of death.
You can find an example of how S188 works at ( IHTM34230).
If there is a payment of call or a rights issue you should check that the loss on sale in respect of that shareholding does not exceed the original date of death value. If it does you will need to adjust the sale value in column B of the form IHT 35 and write alongside the amendment that ‘sale value adjusted under S188 IHTA 1984’. It is for the caseworker to handle any enquiries about the application of this section.