
IHT loophole worth knowing
In current market conditions, many bereaved people are finding that the investments they inherited have dropped in value. In a little-known loophole known as IHT share loss relief, it may be possible to claim a tax rebate when certain qualifying investments are sold at a loss.
However, strict rules, criteria and exemptions apply. For example, to be eligible for the relief, the sale of the qualifying investment (shares listed on a recognised stock exchange excluding AIM, government bonds and/or holdings in investment funds) must be within 12 months of the date of death. Interestingly, few people reclaim the overpaid tax, with just 1,640 taxpayers a year on average (between 2014 and 2019) applying for refunds1. Tax treatment varies according to individual circumstances and is subject to change.
1FoI request Boodle Hatfield, 2022