IHTM34175 - Calculating the loss: call

A call is a payment that the shareholder has to pay the company at a future date. If

  • the appropriate person (IHTM34161) has to make a post-death payment (a call) to a company in respect of qualifying investments (IHTM34131) and
  • those investments are later sold

then the payment is treated as increasing the date of death value of that investment for the purposes of the relief, IHTA84/S182.

Example

Elsie died in June 2014. She owned 1,000 BP shares (partly paid) worth 拢1,600.聽 The legal personal representative paid the second instalment on the shares (拢1,050) that was due on 30 August 2014.聽 The whole holding was subsequently sold for 拢2,200 within 12 months.聽聽聽聽

The total value on death for the purposes of this relief is now 拢2,650.

The loss on sale will be 拢450.

If the appropriate persons paid any call, question 5 on form IHT 35 should be ticked Yes and details of the call should be provided.聽

Payments made in connection with taking up a rights issue (IHTM34187) increase the date of death value in a similar way to call.