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Standard Life highlights statutory IHT loss reliefs

20th November 2008 Print
"At a time when shares and property prices are continuing to fall, there are statutory Inheritance Tax (IHT) reliefs which should not be forgotten about" says Julie Hutchison, Head of Estate Planning with Standard Life

Julie continued, "There are two valuable IHT reliefs available in relation to the estates of deceased persons, where share values or house prices have fallen since date of death. Families and their advisers should make sure these claims are considered."

The statutory reliefs are as follows:

Section 179, Inheritance Tax Act 1984 - this gives relief for the sales of quoted shares sold within one year of date of death. This relief would not apply to the sale of private family company shares.

Section 191, and following sections, Inheritance Tax Act 1984 - which gives relief for the sale of interests in land (including bricks and mortar) sold within 4 years of date of death. The criteria in Section 191 is that the fall in value must be more than £1,000 and more than 5% of its value, as reported at date of death. Similar minimum criteria do not apply to the relief for the sale of quoted shares, detailed in Section 179.

Julie concluded, "If the relief is claimed, the sale price replaces the date of death valuation previously reported to HM Revenue & Customs and a refund of IHT arises. At a time when market values are lower for many assets, these valuable reliefs should be kept in mind, particularly by financial advisers who work closely with law firms."