»Ê¹ÚÌåÓýapp

At the date of death, the deceased owned qualifying investments in four companies, Ash, Beech, Cedar and Elm plc. »Ê¹ÚÌåÓýapp personal representatives sold all the shares within 12 months of the death. »Ê¹ÚÌåÓýapp values on death and at the date of sale, together with the losses or gains made are as follows:

• 2,000 shares in Ash, valued at £2,000 on death, sold for £1,600, a loss of £400.
• 1,500 shares in Beech, valued at £2,200 on death, sold for £2,400, a gain of £200.
• 1,000 shares in Cedar, valued at £5,000 on death, sold for £4,000, a loss of £1,000.
• 500 shares in Elm, valued at £2,000 on death, sold for £2,000, no gain or loss.

»Ê¹ÚÌåÓýapp total value at death was £11,200 and the total sale value is £10,000, giving a net loss of £1,200.

»Ê¹ÚÌåÓýapp personal representatives purchased £5,000 of qualifying investments in the period between the date of death and two months after the date of the last sale.

Because of IHTA84/S180 the loss on sale is reduced by the relevant proportion (IHTM34212)

(£5,000 ÷ £10,000) x £1,200 = £600

»Ê¹ÚÌåÓýapp loss on sale relief is therefore reduced to £600 (£1,200 - £600).

»Ê¹ÚÌåÓýapp revised value of the shares in Ash is £1,600 plus an amount equal to the relevant proportion of the difference between the value on death and the sale price,

which is £1,600 + [(£5,000 ÷ £10,000) x £400] = £1,800.

»Ê¹ÚÌåÓýapp revised value of the shares in Beech is £2,400 less an amount equal to the relevant proportion of the difference between their value on death and the sale price,

which is £2,400 � [(£5,000 ÷ £10,000) x £200] = £2,300.

»Ê¹ÚÌåÓýapp revised value of the shares in Cedar is £4,500, calculated in a similar way as for Ash.

»Ê¹ÚÌåÓýappre is no change in the sale price for Elm.