The global stock market upheaval following the imposition of wide-ranging tariffs by the US President may offer executors of estates an opportunity to mitigate Inheritance Tax (IHT) through a less well known but long-standing tax relief, says private wealth lawyers Broadfield.
Judith Millar, a Partner in the Private Wealth team at the international law firm Broadfield emphasised inheritance tax (IHT) is calculated on values at the point of death. She continued:
“However, when publicly traded stocks and shares are later sold at a lower value, executors can claim what is called ‘loss on sale relief’.
This relief effectively allows the executors of an estate to substitute the actual sale price for the higher date of death valuation. It is a potentially valuable relief when stock markets fall, resulting in the option to claim a refund of IHT already paid.”
She said to qualify for loss on sale relief, the sales of all shares within 12 months of death must be aggregated and produce an overall loss. Millar added:
“Claims can be made up to four years after the end of the 12-month period, even if the administration of the estate has been completed in the meantime.
Claims need to be submitted using the official claim form and supported by documentary evidence of the sale value, and the value of the shares at death.”
