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Inheritance Tax Relief For Losses On Shares

The alarm bells are ringing ...

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POSTED BY HELEN BEAUMONT ON 31/07/2019 @ 8:00AM

Share prices have been erratic over the past few years. Inheritance Tax specialists are beginning to ring the alarm bells ...

With Sterling falling and shares set to follow suit, there may be some Inheritance Tax Reliefs available!

With Sterling falling and shares set to follow suit, there may be some Inheritance Tax Reliefs available!

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This is a problem that sometimes crops up when less experienced tax practitioners and executors act for a particular estate that includes a share portfolio.

When a will gives an executor the power of appropriation, they can sell, convert or transfer assets to cover debts, legacies and beneficiaries, shares come into the spotlight ... and that's the beginning of the problem, because executors selling or transferring underperforming shares don't realise they can reclaim some inheritance tax as a result.

When shares are sold or transferred within one year of death, if the value is less than it was for probate, the inheritance tax can be recalculated at the lower rate. Substantial tax savings can be made.

For example, if George died on 15th December 2018 and left shares worth £50,000, the Inheritance Tax would be £20,000 at 40%. If the shares are now worth £40,000 and are sold a year later, there's a reduction in the Inheritance Tax of £4,000.

An executor should always revalue investments just before the first anniversary of death, consider the new value, especially if selling them at a lower price would create an Inheritance Tax refund.

But you can't dump shares to create a loss as there's an anti-avoidance rule in place by HMRC to stop that. This rule applied to purchases made within two months of the date of the last sale.

With the value of the pound sliding thanks to the uncertainties around Brexit, share prices are following suit so it's a great idea to take a look at the value of investments for any estates under probate and see if there is any Inheritance Tax that can be claimed back.

"Would you like to know more?"

If you'd like to find out more about this Inheritance Tax Relief or any other tax issues, do give me a call on 01908 774323 or click here to ping me an email and let's see how I can help you.

Until next time ...

HELEN BEAUMONT


PS:

If you're looking to work with an expert tax advisor with a wide range of tax experience, do visit www.essendontax.co.uk to find out more about me and discover how I can help!


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More about Helen Beaumont ...

Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen’s specialist knowledge in tax planning and experience ensures every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.