Inheritance Tax Manual

IHTM09732 - Related property: how the rules work

Under IHTA84/S161,

• you bring together the property (IHTM04030) in the deceased or transferor바카라 사이트™s estate (IHTM04029) and the related property (IHTM09733) to make one combined unit which you should value in the normal way, then
• you calculate the 바카라 사이트˜appropriate proportion바카라 사이트™ (IHTM09735) of the value of that combined unit to give you the value of the property in the deceased/transferor바카라 사이트™s estate.

Example

T owns 40 out of the 100 issued shares in X Ltd. T바카라 사이트™s spouse owns 30 of the remaining shares. These shares are related property. Valued on its own T바카라 사이트™s holding is worth £8,000. The value of the combined holding of 70 shares for Inheritance Tax (IHT) purposes is £28,000. Under the related property rules, the value of T바카라 사이트™s holding for IHT purposes is not £8,000, but four sevenths (the appropriate proportion) of £28,000, that is £16,000.