»Ê¹ÚÌåÓýapp

If the appropriate person (IHTM34161) sells the rights, the sale proceeds are added to the gross proceeds of sale of the original holding to see if relief is due, IHTA84/S181.

Example

Jeremy has 1,000 BP shares valued at 540p per share.Ìý »Ê¹ÚÌåÓýappre is a rights issue of 1 share for every 5 at 440p per share.Ìý »Ê¹ÚÌåÓýapp executors sell the rights for £180.Ìý »Ê¹ÚÌåÓýappy then sell the 1,000 shares for 490p per share within 12 months of death.

»Ê¹ÚÌåÓýapp date of death value has to be compared with the sale proceeds of both the rights and the shares themselves.Ìý £5,400 is compared with £4,900 + £180 (£5,080).Ìý »Ê¹ÚÌåÓýapp loss on this particular item is £320.

If only half the holding has been sold, IHTA84/S181 would only require that proportion of the capital receipt to be brought into account.Ìý »Ê¹ÚÌåÓýapp loss would be £2,700 â€� (£2,450 + £90) = £160.

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