For convenience, the term 'relevant property trust' is used to
cover all settlements in which either no beneficial interest in
possession subsists or in which a beneficial interest in possession
arising on or after 22 March 2006 is not ‘qualifying’
for IHT purposes – see the Inheritance Tax manual at
IHTM16061 et seq for guidance.
Section 1 details the shares subject to the
present charge. The particulars given and the valuation
requirements will, however, depend on the relevant tax claim (as
identified in Section 4).
In the case of a ten-year anniversary charge only Section 1
is completed. The Section will show all the shares subject to the
relevant property trust at the date of the charge and the value of
these shares is required on the day
before the date of the charge. See also this
chapter
SVM108060 – the VAL72 and Risk
Assessment for Ten Year Anniversary Charge.
If you are satisfied that 100% BR/AR applies to the shares
in Section 1, you can report accordingly and take no further
action, even if Section 3 is also completed.
In the case of proportionate charges, Section 1 will show
the shares leaving the relevant property trust at the date of the
charge. Tax is charged on the 'loss to the trust' and valuation is
required of all the shares subject to the relevant property trust
immediately before the event and also of any retained shares
immediately afterwards (see Section 2).
Section 2 applies only to proportionate charges
and special trust charges and gives details of any retained shares
after the event. This is for the purpose of calculating the 'loss
to the trust'. To establish the pre-event total of shares, the
shares in this section must be added to those in Section 1.
Staff in Non-Death Compliance Teams are instructed to obtain
full details of any retained shares from the agents prior to
completing the Val 70; and if they learn that there are none, they
should write 'None' in the section. SAV need not check or question
the details given, unless information obtained during the normal
course of negotiations casts doubts on their accuracy.
Section 3 is only completed in the case of
proportionate charges arising on a transfer out of a trust before
the settlement's first ten-year anniversary (s.68 proportionate
charges). If Section 3 is completed and 100% BR/AR is not due on
the shares etc. in Section 1, the valuation is a two-stage process.
Firstly, we have to consider the value of the shares transferred
into the settlement at the time of that transfer (Section 3). For
this purpose, we value the shares in isolation, ignoring any shares
retained by the settlor or related property.
If you consider that the value of the shares etc. shown at
3(a) does not exceed the figure shown at 3(b), you should advise
Compliance Group accordingly and not proceed to the valuation at
Section 1. Where the value of the shares at 3(a) exceeds the figure
at 3(b), SAV will (subject to risk assessment criteria) need to
agree values both for the shares at Section 3 (to establish the
rate of tax) and those at Section 1, which are subject to the
present charge. BR/AR/Instalments, may, of course, be relevant to
the shares etc. itemised in Section 1. [As indicated above, you
will only need to consider the Section 3 valuation at all, if 100%
BR/AR does not apply to the shares in Section 1.]
If Section 3 shows the (a) figure as not exceeding the (b)
figure, the provisional rate of tax will be nil. If SAV's opinion
of value causes the 3(b) figure to be exceeded, you should refer
back to Non-Death Compliance Group for an indication of the rate of
tax chargeable on the basis of your figures. Even where the
parties' figure at (a) is in excess of (b), a substantial increase
in value will increase the rate of tax, so if you consider the
shares at 3 to have a much greater value than was originally
returned, check with the IHT caseworker as to the effect agreeing
your value would have on the rate of tax.
Section 4 indicates how the claim for tax arises.
Section 5 applies as for Section 4 of the Val 70
(Lifetime). See this chapter
SVM108030.
For the purposes of the two reliefs in relevant property
trust cases, however, the statutory references to the 'transferor'
include references to the trustees of a relevant property trust.
Section 6 shows the appropriate tax rates based on
the agents' values for the taxable property. These are given simply
as a guide to help share valuers when considering how far a case is
worth pursuit.
Sections 7 - 9 will contain any other information
relevant to the share valuation included in the IHT Account or
Compliance Group file.
| Additional Guidance: SVM150000 |
