Law

Inheritance Tax Act 1984

United Kingdom · statute

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In force since 2026-04-06, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

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Contents: 422 provisions

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422 provisions

151E Rate or rates of charge under section 151D

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152 Cash options.

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153 Overseas pensions.

(1) In determining for the purposes of this Act the value of a person’s estate immediately before his death there shall be left out of account any pension payable under the regulations or rules relating to any fund vested in Commissioners under section 273 of the Government of India Act 1935 or to any fund administered under a scheme made under section 2 of the Overseas Pensions Act 1973 which is certified by the Secretary of State for the purpose of this section to correspond to an Order in Council under subsection (1) of the said section 273. (2) For the purposes of this Act— (a) a pension paid under the authority of a scheme made under section 2 of the Overseas Pensions Act 1973 which is constituted by the Pensions (India, Pakistan and Burma) Act 1955 or is certified by the Secretary of State for the purposes of this section to correspond to the said Act of 1955 shall be treated as if it had been paid by the Government of India or the Government of Pakistan (according as the arrangements in pursuance of which the pension was first paid under the said Act of 1955 were made with the one or the other Government); (b) a pension paid out of any fund established in the United Kingdom by the Government of any country which, at the time when the fund was established, was, or formed part of, a colony, protectorate, protected state or United Kingdom trust territory shall, if the fund was established for the sole purpose of providing pensions, whether contributory or not, payable in respect of service under the Government be treated as if it had been paid by the Government by which the fund was established; (c) a pension paid out of the Central African Pension Fund established by section 24 of the Federation of Rhodesia and Nyasaland (Dissolution) Order in Council 1963 shall be treated as if it had been paid by the Government of a territory outside the United Kingdom; and (d) so much of any pension paid to or in respect of any person under— (i) the scheme which by virtue of subsection (3) of section 2 of the Overseas Pensions Act 1973 is constituted under that section by section 2 or subsection (2) of section 4 of the Overseas Service Act 1958, or (ii) such other scheme made under section 2 of the Overseas Pensions Act 1973 as is certified by the Secretary of State for the purposes of the Taxes Act to correspond to section 2 or subsection (2) of section 4 of the Overseas Service Act 1958, as is certified by the Secretary of State to be attributable to service under the Government of an overseas territory shall be treated as if it had been paid by the Government of that territory. (3) Subsection (1) above shall be construed as if contained in section 273 of the Government of India Act 1935; and for the purposes of subsection (2) above— (a) “pension” includes a gratuity and any sum payable on or in respect of death, and a return of contributions with or without interest thereon or any other addition thereto; (b) “United Kingdom trust territory” means a territory administered by the Government of the United Kingdom under the trusteeship system of the United Nations; (c) “overseas territory” means any country or territory outside the United Kingdom; (d) references to the Government of any such country or territory as is mentioned in paragraph (b) or (d) of that subsection include a Government constituted for two or more such countries or territories and any authority established for the purpose of providing or administering services which are common to, or relate to matters of common interest to, two or more such countries or territories. (4) If, by reason of Her Majesty’s Government in the United Kingdom having assumed responsibility for a pension, allowance or gratuity within the meaning of section 1 of the Overseas Pensions Act 1973, payments in respect of it are made under that section, this section shall apply in relation to the pension, allowance or gratuity, exclusive of so much (if any) of it as is paid by virtue of the application to it of any provisions of the Pensions (Increase) Act 1971 or any enactment repealed by that Act, as if it continued to be paid by the Government or other body or fund which had responsibility for it before that responsibility was assumed by Her Majesty’s Government in the United Kingdom.

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153ZA Qualifying payments

(1) This section applies where a qualifying payment has at any time been received by a person (“P”), or by the personal representatives of P. (2) The tax chargeable on the value transferred by the transfer made on P's death (the “value transferred”) is to be reduced by an amount equal to— (a) the relevant percentage of the amount of the qualifying payment, or (b) if lower, the amount of tax that would, apart from this section, be chargeable on the value transferred. (3) In subsection (2) “relevant percentage” means the percentage specified in the last row of the third column of the Table in Schedule 1. (4) For the purposes of this section, a “qualifying payment” is a payment that meets Condition A, B or C. (5) Condition A is that the payment— (a) is of a kind specified in Part 1 of Schedule 5A, and (b) is made to a person, or the personal representatives of a person, who was— (i) a victim of National-Socialist persecution, or (ii) the spouse or civil partner of a person within sub-paragraph (i). (6) Condition B is that the payment is of a kind listed in Part 2 of Schedule 5A. (7) Condition C is that the payment— (a) is of a kind specified in regulations made by the Treasury, and (b) is made to a person, or the personal representatives of a person, who was— (i) held as a prisoner of war, or a civilian internee, during the Second World War, or (ii) the spouse or civil partner of a person within sub-paragraph (i). (8) The Treasury may by regulations add a payment of a specified kind to the list in Part 1 of Schedule 5A. (8A) Regulations under this section may have effect in relation to deaths occurring before the regulations are made. (9) Regulations under this section are to be made by statutory instrument. (10) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of the House of Commons.

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153A Death of emergency service personnel etc

(1) The reliefs in subsection (2) apply where a person— (a) dies from an injury sustained, accident occurring or disease contracted at a time when that person was responding to emergency circumstances in that person's capacity as an emergency responder, or (b) dies from a disease contracted at some previous time, the death being due to, or hastened by, the aggravation of the disease during a period when that person was responding to emergency circumstances in that person's capacity as an emergency responder. (2) The reliefs are— (a) that no potentially exempt transfer made by the person becomes a chargeable transfer under section 3A(4) because of the death, (b) that section 4 (transfers on death) does not apply in relation to the death, and (c) that no additional tax becomes due under section 7(4) because of a transfer made by the person within 7 years of the death. (3) “Emergency circumstances” means circumstances which are present or imminent and are causing or likely to cause— (a) the death of a person, (b) serious injury to, or the serious illness of, a person, (c) the death of an animal, (d) serious injury to, or the serious illness of, an animal, (e) serious harm to the environment (including the life and health of plants and animals), (f) serious harm to any building or other property, or (g) a worsening of any such injury, illness or harm. (4) A person is “responding to emergency circumstances” if the person— (a) is going anywhere for the purpose of dealing with emergency circumstances occurring there, or (b) is dealing with emergency circumstances, preparing to do so imminently or dealing with the immediate aftermath of emergency circumstances. (5) For the purposes of this section, circumstances to which a person is responding are to be taken to be emergency circumstances if the person believes and has reasonable grounds for believing they are or may be emergency circumstances. (6) “Emergency responder” means— (a) a person employed, or engaged, in connection with the provision of fire services or fire and rescue services, (b) a person employed for the purposes of providing, or engaged to provide, search services or rescue services (or both), (c) a person employed for the purposes of providing, or engaged to provide, medical, ambulance or paramedic services, (d) a constable or a person employed for police purposes or engaged to provide services for police purposes, (e) a person employed for the purposes of providing, or engaged to provide, services for the transportation of organs, blood, medical equipment or medical personnel, or (f) a person employed, or engaged, by the government of a state or territory, an international organisation or a charity in connection with the provision of humanitarian assistance. (7) For the purposes of subsection (6)— (a) it is immaterial whether the employment or engagement is paid or unpaid, and (b) “international organisation” means an organisation of which— (i) two or more sovereign powers are members, or (ii) the governments of two or more sovereign powers are members. (8) The Treasury may, by regulations made by statutory instrument, extend the definition of “emergency responder” in subsection (6). (9) Regulations under this section are subject to annulment in pursuance of a resolution of the House of Commons.

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154 Death on active service, etc.

(1) The reliefs in subsection (1A) apply in relation to the death of a person in whose case it is certified by the Defence Council or the Secretary of State— (a) that he died from a wound inflicted, accident occurring or disease contracted at a time when the conditions specified in subsection (2) below were satisfied, or (b) that he died from a disease contracted at some previous time, the death being due to or hastened by the aggravation of the disease during a period when those conditions were satisfied. (1A) The reliefs are— (a) that no potentially exempt transfer made by the deceased becomes a chargeable transfer under section 3A(4) because of the death, (b) that section 4 (transfers on death) does not apply in relation to the death, and (c) that no additional tax becomes due under section 7(4) because of a transfer made by the deceased within 7 years of the death. (2) The conditions referred to in subsection (1) above are that the deceased was a member of any of the armed forces of the Crown or a civilian subject to service discipline within the meaning of the Armed Forces Act 2006 and (in any case) was ...— (a) on active service against an enemy, or (b) on other service of a warlike nature or which in the opinion of the Treasury involved the same risks as service of a warlike natureor (c) responding to emergency circumstances in the course of the person's duties as a member of any of those armed forces or as a civilian subject to service discipline. (2A) Section 153A(3) to (5) applies for the purposes of this section. (3) In relation to any time before 28th July 1981 (the date of the passing of the Armed Forces Act 1981), the reference in subsection (2) above to membership of the armed forces of the Crown shall include a reference to employment as a person of any of the descriptions specified in paragraph 1(3) of Schedule 7 to the Finance Act 1975 (women’s services).

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155 Visiting forces, etc.

(1) Section 6(4) above applies to— (a) the emoluments paid by the Government of any designated country to a member of a visiting force of that country, not being a British citizen, a British Dependent Territories citizen, a British National (Overseas) or a British Overseas citizen, and (b) any tangible movable property the presence of which in the United Kingdom is due solely to the presence in the United Kingdom of such a person while serving as a member of the force. (2) A period during which any such member of a visiting force as is referred to in subsection (1) above is in the United Kingdom by reason solely of his being such a member shall not be treated for the purposes of this Act as a period of residence in the United Kingdom or as creating a change of his residence .... (3) References in subsections (1) and (2) above to a visiting force shall apply to a civilian component of a visiting force as they apply to the force itself, and those subsections shall be construed as one with Part I of the Visiting Forces Act 1952, but so that for the purposes of this section references to a designated country shall be substituted in that Act for references to a country to which a provision of that Act applies. (4) For the purpose of conferring on persons attached to any designated international military headquarters the like benefits as are conferred by subsections (1) and (2) above on members of a visiting force or civilian component, any members of the armed forces of a designated country shall, while attached to any such headquarters, be deemed to constitute a visiting force of that country, and there shall be a corresponding extension of the class of persons who may be treated as members of a civilian component of such a visiting force. (5) In the case of persons of any category for the time being agreed between Her Majesty’s Government in the United Kingdom and the other members of the North Atlantic Council, employment by a designated allied headquarters shall be treated for the purposes of subsections (1)(b) and (2) above as if it were service as a member of a visiting force of a designated country. (5A) Section 6(4) also applies to— (a) the emoluments paid by the Government of any designated country to a person belonging to the EU civilian staff, not being a British citizen, a British overseas territories citizen, a British National (Overseas) or a British Overseas citizen, and (b) any tangible movable property the presence of which in the United Kingdom is due solely to the presence in the United Kingdom of such a person serving as part of that staff. (5B) A period during which any such person belonging to the EU civilian staff as is referred to in subsection (5A) is in the United Kingdom by reason solely of that person belonging to that staff is not to be treated for the purposes of this Act as a period of residence in the United Kingdom or as creating a change of that person's residence .... (6) For the purposes of this section— “allied headquarters” means any international military headquarters established under the North Atlantic Council; “designated” means designated for the purpose in question by or under any Order in Council made for giving effect to any international agreement. “the EU civilian staff” means— civilian personnel seconded by a member State to an EU institution for the purposes of activities (including exercises) relating to the preparation for, and execution of, tasks mentioned in Article 43(1) of the Treaty on European Union (tasks relating to a common security and defence policy), as amended from time to time, and civilian personnel (other than locally hired personnel)— made available to the EU by a member State to work with designated international military headquarters or a force of a designated country, or otherwise made available to the EU by a member State for the purposes of activities of the kind referred to in paragraph (a). (7) Any Order in Council made under section 73 of the Finance Act 1960 which is in force immediately before the passing of this Act shall have effect for the purposes of this section as if it had also been made under this section, and may be varied or revoked accordingly.

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155ZA Foreign diplomats etc

(1) In determining whether a person is a long-term UK resident for the purposes of this Act, the person is treated (so far as would not otherwise be the case) as not having been resident in the United Kingdom for any tax year in which they were subject at any time to a relevant international exemption. (2) For that purpose a person is “subject to a relevant international exemption” at a given time if, were the person to die at that time, an exemption in respect of inheritance tax would apply in relation to any of the person’s property by virtue of any of the following— the Diplomatic Privileges Act 1964 the Consular Relations Act 1968 the International Organisations Act 1968 the European Communities Act 1972 the International Criminal Court Act 2001.

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155A Death of constables and service personnel targeted because of their status

(1) The reliefs in subsection (3) apply where a person— (a) dies from an injury sustained or disease contracted in circumstances where the person was deliberately targeted by reason of his or her status as a constable or former constable, or (b) dies from a disease contracted at some previous time, the death being due to, or hastened by, the aggravation of the disease by an injury sustained or disease contracted in circumstances mentioned in paragraph (a). (2) The reliefs in subsection (3) apply where it is certified by the Defence Council or the Secretary of State that a person— (a) died from an injury sustained or disease contracted in circumstances where the person was deliberately targeted by reason of his or her status as a service person or former service person, or (b) died from a disease contracted at some previous time, the death being due to, or hastened by, the aggravation of the disease by an injury sustained or disease contracted in circumstances mentioned in paragraph (a). (3) The reliefs are— (a) that no potentially exempt transfer made by the person becomes a chargeable transfer under section 3A(4) because of the death, (b) that section 4 (transfers on death) does not apply in relation to the death, and (c) that no additional tax becomes due under section 7(4) because of a transfer made by the person within 7 years of the death. (4) For the purposes of this section, it is immaterial whether a person who was a constable or service person at the time the injury was sustained or the disease was contracted was acting in the course of his or her duties as such at that time (and for this purpose ignore the references in subsections (1)(b) and (2)(b) to a disease contracted at some previous time). (5) “Service person” means a person who is a member of the armed forces of the Crown or a civilian subject to service discipline (within the meaning of the Armed Forces Act 2006). (6) This section does not apply where section 153A or 154 applies in relation to a person's death.

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156 Apsley House and Chevening Estate.

This Act shall not apply in respect of— (a) the rights conferred by section 3 of the Wellington Museum Act 1947, or (b) property held on the trusts of the trust instrument set out in the Schedule to the Chevening Estate Act 1959.

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157 Non-residents’ bank accounts.

(1) In determining for the purposes of this Act the value of the estate immediately before his death of a person to whom this section applies there shall be left out of account the balance on— (a) any qualifying foreign currency account of his, and (b) subject to subsection (3) below, any qualifying foreign currency account of the trustees of settled property in which he is beneficially entitled to an interest in possession. (2) This section applies to a person who ... immediately before his death is neither resident in the United Kingdom nor a long-term UK resident. (3) Subsection (1)(b) above does not apply in relation to settled property if— (a) the trustees are resident in the United Kingdom immediately before the beneficiary’s death, (b) the settlor is alive and is a long-term UK resident immediately before the beneficiary’s death, (c) the settlor died on or after 6 April 2025 and was ... a long-term UK resident immediately before they died, or (d) the settlor died before 6 April 2025 and was ... domiciled in the United Kingdom when the property became comprised in the settlement. (3A) This section is subject to paragraph 5 of Schedule A1 (non-excluded overseas property). (4) For the purposes of this section— (a) the question whether a person is resident ... in the United Kingdom shall, subject to paragraph (b) below, be determined as for the purposes of income tax; but (b) the trustees of a settlement shall be regarded as not resident ... in the United Kingdom unless the general administration of the settlement is ordinarily carried on in the United Kingdom and the trustees or a majority of them (and, where there is more than one class of trustees, a majority of each class) are resident ... there. (5) In this section “qualifying foreign currency account” means a foreign currency account with a bank ...; and for this purpose— (a) “foreign currency account” means any account other than one denominated in sterling, . . . (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) In this section “bank” has the meaning given by section 991 of the Income Tax Act 2007.

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158 Double taxation conventions.

(1) If Her Majesty by Order in Council declares— (a) that arrangements specified in the Order have been made with the government of any territory outside the United Kingdom with a view to affording relief from double taxation in relation to inheritance tax payable under the laws of the United Kingdom and any tax imposed under the laws of that territory which is of a similar character or is chargeable on or by reference to death or gifts inter vivos, and (b) that it is expedient that those arrangements should have effect; the arrangements shall, notwithstanding anything in this Act, have effect so far as they provide for relief from inheritance tax, or for determining the place where any property is to be treated as situated for the purposes of the tax. (1ZA) For the purposes of this section, arrangements made with a view to affording relief from double taxation include any arrangements which modify the effect of arrangements so made. (1ZB) Arrangements to which effect is given under this section may include provision conferring (with or without other functions) functions relating to the determination of matters arising under the arrangements on a public authority in the United Kingdom or in a territory outside the United Kingdom. (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Any arrangements to which effect is given under this section may include provision for relief in cases occurring before the making of the arrangements and provisions as to property which is not itself subject to double taxation. (3) Any Order in Council under this section which revokes an earlier Order may contain such transitional provisions as appear to Her Majesty to be necessary or expedient. (4) An Order under this section shall not be submitted to Her Majesty in Council unless a draft of it has been laid before, and approved by resolution of, the House of Commons. (5) Where any arrangements have effect by virtue of this section, no obligation as to secrecy shall prevent the Board or an authorised officer of the Board from disclosing to any authorised officer of the government with which the arrangements are made such information as is required to be disclosed under the arrangements. (6) Where arrangements with the government of any territory outside the United Kingdom are specified under any Order in Council which— (a) was made, or has effect as made, under section 54 of the Finance (No.2) Act 1945 or section 2 of the Finance Act (Northern Ireland) 1946, and (b) had effect immediately before the passing of this Act, the Order shall notwithstanding the repeal of that section by the Finance Act 1975, remain in force and have effect as if any provision made by those arrangements in relation to estate duty extended to inheritance tax chargeable by virtue of section 4 above; but the Order may be amended or revoked by an Order in Council made under this section.

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159 Unilateral relief.

(1) Where the Board are satisfied that in any territory outside the United Kingdom (an “overseas territory”) any amount of tax imposed by reason of any disposition or other event is attributable to the value of any property, then, if— (a) that tax is of a character similar to that of inheritance tax or is chargeable on or by reference to death or gifts inter vivos, and (b) any inheritance tax chargeable by reference to the same disposition or other event is also attributable to the value of that property, they shall allow a credit in respect of that amount (“the overseas tax”) against that inheritance tax in accordance with the following provisions. (2) Where the property is situated in the overseas territory and not in the United Kingdom, the credit shall be of an amount equal to the overseas tax. (3) Where the property— (a) is situated neither in the United Kingdom nor in the overseas territory, or (b) is situated both in the United Kingdom and in the overseas territory, the credit shall be of an amount calculated in accordance with the following formula— A A + B × C where A is the amount of the inheritance tax, B is the overseas tax and C is whichever of A and B is the smaller. (4) Where tax is imposed in two or more overseas territories in respect of property which— (a) is situated neither in the United Kingdom nor in any of those territories, or (b) is situated both in the United Kingdom and in each of those territories, subsection (3) above shall apply as if, in the formula there set out, B were the aggregate of the overseas tax imposed in each of those territories and C were the aggregate of all, except the largest, of A and the overseas tax imposed in each of them. (5) Where credit is allowed under subsection (2) above or section 158 above in respect of overseas tax imposed in one overseas territory, any credit under subsection (3) above in respect of overseas tax imposed in another shall be calculated as if the inheritance tax were reduced by the credit allowed under subsection (2) or section 158; and where, in the case of any overseas territory mentioned in subsection (3) or (4) above, credit is allowed against the overseas tax for tax charged in a territory in which the property is situated, the overseas tax shall be treated for the purposes of those provisions as reduced by the credit. (6) In this section references to tax imposed in an overseas territory are references to tax chargeable under the law of that territory and paid by the person liable to pay it. (7) Where relief can be given both under this section and under section 158 above, relief shall be given under whichever section provides the greater relief.

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159A Treatment of dormant assets

(1) This section applies where there is a transfer in respect of a dormant asset. (2) There is a transfer in respect of a dormant asset where an amount is transferred by an institution in respect of an asset— (a) to an authorised reclaim fund, with the result that section 1 of the 2008 Act or section 2, 5, 8, 12 or 14 of the 2022 Act applies in relation to the asset, or (b) to an authorised reclaim fund and one or more charities, with the result that section 2 of the 2008 Act applies in relation to the asset. (3) For the purposes of this Act, rights which a person (“P”) acquires under Part 1 of the 2008 Act or Part 1 or sections 22 to 25 of the 2022 Act (as the case may be) after the transfer are to be treated as the same asset as the original rights, acquired as the original rights were acquired and having the same characteristics as those rights. (4) For the purposes of this section— “the 2008 Act” means the Dormant Bank and Building Society Accounts Act 2008; “the 2022 Act” means the Dormant Assets Act 2022; “asset” means an asset within the scope of the dormant assets scheme (see section 1(6) of the 2022 Act); “authorised reclaim fund” has the same meaning as in the Dormant Assets Acts 2008 to 2022; “the original rights” are— in a case where— section 8 of the 2022 Act (investment assets) applies in relation to the asset and there has been a conversion as mentioned in section 9(3)(a) of that Act in connection with the transfer, or section 14 of the 2022 Act (securities assets) applies in relation to the asset and there has been a conversion as mentioned in section 15(1)(a) of that Act in connection with the transfer, P’s rights against the institution immediately before that conversion; in any other case, P’s rights against the institution immediately before the transfer.

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160 Market value.

Except as otherwise provided by this Act, the value at any time of any property shall for the purposes of this Act be the price which the property might reasonably be expected to fetch if sold in the open market at that time; but that price shall not be assumed to be reduced on the ground that the whole property is to be placed on the market at one and the same time.

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161 Related property.

(1) Where the value of any property comprised in a person’s estate would be less than the appropriate portion of the value of the aggregate of that and any related property, it shall be the appropriate portion of the value of that aggregate. (2) For the purposes of this section, property is related to the property comprised in a person’s estate if— (a) it is comprised in the estate of his spouse or civil partner ; or (b) it is or has within the preceding five years been— (i) the property of a charity, or held on trust for charitable purposes only, or (ii) the property of a body mentioned in section 24, 24A,or 25 above, and became so on a transfer of value which was made by him or his spouse or civil partner after 15th April 1976 and was exempt to the extent that the value transferred was attributable to the property. (3) The appropriate portion of the value of the aggregate mentioned in subsection (1) above is such portion thereof as would be attributable to the value of the first-mentioned property if the value of that aggregate were equal to the sums of the values of that and any related property, the value of each property being determined as if it did not form part of that aggregate. (4) For the purposes of subsection (3) above the proportion which the value of a smaller number of shares of any class bears to the value of a greater number shall be taken to be that which the smaller number bears to the greater; and similarly with stock, debentures and units of any other description of property. (5) Shares shall not be treated for the purposes of subsection (4) above as being of the same class unless they are so treated by the practice of a recognised stock exchange or would be so treated if dealt with on such a stock exchange.

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162 Liabilities.

(1) A liability in respect of which there is a right to reimbursement shall be taken into account only to the extent (if any) that reimbursement cannot reasonably be expected to be obtained. (2) Subject to subsection (3) below, where a liability falls to be discharged after the time at which it is to be taken into account it shall be valued as at the time at which it is to be taken into account. (3) In determining the value of a transferor’s estate immediately after a transfer of value, his liability for inheritance tax shall be computed— (a) without making any allowance for the fact that the tax will not be due immediately, and (b) as if any tax recovered otherwise than from the transferor (or a person liable for it under section 203(1) below) were paid in discharge of a liability in respect of which the transferor had a right to reimbursement. (4) A liability which is an incumbrance on any property shall, so far as possible and to the extent that it is not taken to reduce value in accordance with section 162B, be taken to reduce the value of that property. (5) Where a liability taken into account is a liability to a person resident outside the United Kingdom which neither— (a) falls to be discharged in the United Kingdom, nor (b) is an incumbrance on property in the United Kingdom, it shall, so far as possible and to the extent that it is not taken to reduce value in accordance with section 162B, be taken to reduce the value of property outside the United Kingdom.

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162A Liabilities attributable to financing excluded property

(1) To the extent that a liability is attributable to financing (directly or indirectly)— (a) the acquisition of any excluded property, or (b) the maintenance, or an enhancement, of the value of any such property, it may only be taken into account so far as permitted by subsections (2) to (4). (2) Where the property mentioned in subsection (1) has been disposed of, in whole or in part, for full consideration in money or money's worth, the liability may be taken into account up to an amount equal to so much of that consideration as— (a) is not excluded property, and (b) has not been used— (i) to finance (directly or indirectly) the acquisition of excluded property or the maintenance, or an enhancement, of the value of such property, or (ii) to discharge (directly or indirectly) any other liability that, by virtue of this section, would not be taken into account. (3) The liability may be taken into account up to an amount equal to the value of such of the property mentioned in subsection (1) as— (a) has not been disposed of, and (b) is no longer excluded property. (4) To the extent that any remaining liability is greater than the value of such of the property mentioned in subsection (1) as— (a) has not been disposed of, and (b) is still excluded property, it may be taken into account, but only so far as the remaining liability is not greater than that value for any of the reasons mentioned in subsection (7). (5) Subsection (6) applies where— (a) a liability or any part of a liability is attributable to financing (directly or indirectly)— (i) the acquisition of property that was not excluded property, or (ii) the maintenance, or an enhancement, of the value of such property, and (b) the property or part of the property— (i) has not been disposed of, and (ii) has become excluded property. (6) The liability or (as the case may be) the part may only be taken into account to the extent that it exceeds the value of the property, or the part of the property, that has become excluded property, but only so far as it does not exceed that value for any of the reasons mentioned in subsection (7). (7) The reasons are— (a) arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage, (b) an increase in the amount of the liability (whether due to the accrual of interest or otherwise), or (c) a disposal, in whole or in part, of the property. (8) In this section— “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations; “remaining liability” means the liability mentioned in subsection (1) so far as subsections (2) and (3) do not permit it to be taken into account; “tax advantage” means— the avoidance or reduction of a charge to tax, or the avoidance of a possible determination in respect of tax.

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162AA Liabilities attributable to financing non-residents' foreign currency accounts

(1) This section applies if— (a) in determining the value of a person's estate immediately before death, a balance on any qualifying foreign currency account (“the relevant balance”) is to be left out of account under section 157 (non-residents' bank accounts), and (b) the person has a liability which is attributable, in whole or in part, to financing (directly or indirectly) the relevant balance. (2) To the extent that the liability is attributable as mentioned in subsection (1)(b), it may only be taken into account in determining the value of the person's estate immediately before death so far as permitted by subsection (3). (3) If the amount of the liability that is attributable as mentioned in subsection (1)(b) exceeds the value of the relevant balance, the excess may be taken into account, but only so far as the excess does not arise for either of the reasons mentioned in subsection (4). (4) The reasons are— (a) arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage, or (b) an increase in the amount of the liability (whether due to the accrual of interest or otherwise). (5) In subsection (4)(a)— “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable, and any associated operations; “tax advantage” means— the avoidance or reduction of a charge to tax, or the avoidance of a possible determination in respect of tax.

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162B Liabilities attributable to financing certain relievable property

(1) Subsection (2) applies if— (a) the whole or part of any value transferred by a transfer of value is to be treated as reduced, under section 104, by virtue of it being attributable to the value of relevant business property, and (b) the transferor has a liability which is attributable, in whole or in part, to financing (directly or indirectly)— (i) the acquisition of that property, or (ii) the maintenance, or an enhancement, of its value. (2) The liability is, so far as possible, to be taken to reduce the value attributable to the value of the relevant business property, before it is treated as reduced under section 104, but only to the extent that the liability— (a) is attributable as mentioned in subsection (1)(b), and (b) does not reduce the value of the relevant business property by virtue of section 110(b). (3) Subsection (4) applies if— (a) the whole or part of any value transferred by a transfer of value is to be treated as reduced, under section 116, by virtue of it being attributable to the agricultural value of agricultural property, and (b) the transferor has a liability which is attributable, in whole or in part, to financing (directly or indirectly)— (i) the acquisition of that property, or (ii) the maintenance, or an enhancement, of its agricultural value. (4) To the extent that the liability is attributable as mentioned in subsection (3)(b), it is, so far as possible, to be taken to reduce the value attributable to the agricultural value of the agricultural property, before it is treated as reduced under section 116. (5) Subsection (6) applies if— (a) part of the value of a person's estate immediately before death is attributable to the value of land on which trees or underwood are growing, (b) the value of the trees or underwood is to be left out of account, under section 125(2)(a), in determining the value transferred by the chargeable transfer made on the person's death, and (c) the person has a liability which is attributable, in whole or in part, to financing (directly or indirectly)— (i) the acquisition of the land or trees or underwood, (ii) planting the trees or underwood, or (iii) the maintenance, or an enhancement, of the value of the trees or underwood. (6) To the extent that the liability is attributable as mentioned in subsection (5)(c), it is, so far as possible, to be taken to reduce the value of the trees or underwood, before their value is left out of account. (7) Subject to subsection (8), to the extent that a liability is, in accordance with this section, taken to reduce value in determining the value transferred by a chargeable transfer, that liability is not then to be taken into account in determining the value transferred by any subsequent transfer of value by the same transferor. (8) Subsection (7) does not prevent a liability from being taken into account by reason only that the liability has previously been taken into account in determining the amount on which tax is chargeable under section 64. (9) For the purposes of subsections (1) to (4) and (7), references to a transfer of value or chargeable transfer include references to an occasion on which tax is chargeable under Chapter 3 of Part 3 (apart from section 79) and— (a) references to the value transferred by a transfer of value or chargeable transfer include references to the amount on which tax is then chargeable, and (b) references to the transferor include references to the trustees of the settlement concerned. (10) In this section— “agricultural property” and “agricultural value” have the same meaning as in Chapter 2 of Part 5; “relevant business property” has the same meaning as in Chapter 1 of Part 5.

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162C Sections 162A, 162AA and 162B: supplementary provision

(1) This section applies for the purposes of determining the extent to which a liability is attributable as mentioned in section 162A(1) or (5) , 162AA(1) or 162B(1)(b), (3)(b) or (5)(c). (1A) In a case in which the value of a person's estate immediately before death is to be determined, where a liability was discharged in part before that time— (a) any part of the liability that, at the time of discharge, was not attributable as mentioned in subsection (1) is, so far as possible, to be taken to have been discharged first, (b) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162B(1)(b), (3)(b) or (5)(c) is, so far as possible, only to be taken to have been discharged after any part of the liability within paragraph (a) was discharged, (c) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162AA(1) is, so far as possible, only to be taken to have been discharged after any parts of the liability within paragraph (a) or (b) were discharged, and (d) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162A(1) or (5) is, so far as possible, only to be taken to have been discharged after any parts of the liability within paragraphs (a) to (c) were discharged. (2) In any other case, where a liability was discharged in part before the time in relation to which the question as to whether or how to take it into account arises— (a) any part of the liability that, at the time of discharge, was not attributable as mentioned in section 162A(1) or (5) or 162B(1)(b), (3)(b) or (5)(c) is, so far as possible, to be taken to have been discharged first, (b) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162B(1)(b), (3)(b) or (5)(c) is, so far as possible, only to be taken to have been discharged after any part of the liability within paragraph (a) was discharged, and (c) any part of the liability that, at the time of discharge, was attributable as mentioned in section 162A(1) or (5) is, so far as possible, only to be taken to have been discharged after any parts of the liability within paragraph (a) or (b) were discharged.

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163 Restriction on freedom to dispose.

(1) Where, by a contract made at any time, the right to dispose of any property has been excluded or restricted, then, in determining the value of the property for the purpose of the first relevant event happening after that time,— (a) the exclusion or restriction shall be taken into account only to the extent (if any) that consideration in money or money’s worth was given for it, but (b) if the contract was a chargeable transfer or was part of associated operations which together were a chargeable transfer, an allowance shall be made for the value transferred thereby (calculated as if no tax had been chargeable on it) or for so much of the value transferred as is attributable to the exclusion or restriction. (2) Where the contract was made before 27th March 1974 subsection (1) above applies only if the first relevant event is a transfer made on death. (3) In this section “relevant event”, in relation to any property, means— (a) a chargeable transfer in the case of which the whole or part of the value transferred is attributable to the value of the property; and (b) anything which would be such a chargeable transfer but for this section.

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164 Transferor’s expenses.

In determining the value transferred by a transfer of value, expenses incurred by the transferor in making the transfer (but not his liability for inheritance tax)— (a) shall, if borne by him, be left out of account; (b) shall, if borne by a person benefiting from the transfer, be treated as reducing the value transferred.

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165 Tax on capital gains.

(1) Where a chargeable transfer is or includes a disposal of an asset and on the disposal a gain accrues to the transferor for the purposes of the 1992 Act, then if— (a) the whole or part of the gain is a chargeable gain or a development gain, and (b) the whole or part of any capital gains tax or income tax chargeable on the gain is borne by the donee (within the meaning of section 282 of that Act), the amount of the tax so borne shall be treated as reducing the value transfered by the chargeable transfer. (2) Subsection (1) above shall not apply where the chargeable transfer is made under Part III of this Act and the gain accrues to the trustees of the settlement; but if in such a case any capital gains tax chargeable on the gain is borne by a person who becomes absolutely entitled to the settled property concerned, the amount of the tax so borne shall be treated as reducing the value transferred by the chargeable transfer. (3) In any case where— (a) payment of an amount of capital gains tax is postponed by virtue of Schedule 14 to the Finance Act 1984, and (b) any of that capital gains tax becomes payable in accordance with paragraph 11 of that Schedule by reason of the receipt of a capital payment by a close relative of the beneficiary, as mentioned in sub-paragraph (3) of that paragraph, and (c) all or part of the capital gains tax becoming so payable is paid by the close relative, the payment by the close relative shall be treated for the purposes of this Act as made in satisfaction of a liability of his.

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166 Creditors’ rights.

In determining the value of a right to receive a sum due under any obligation it shall be assumed that the obligation will be duly discharged, except if or to the extent that recovery of the sum is impossible or not reasonably practicable and has not become so by any act or omission of the person to whom the sum is due.

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167 Life policies, etc.

(1) In determining in connection with a transfer of value the value of a policy of insurance on a person’s life or of a contract for an annuity payable on a person’s death, that value shall be taken to be not less than— (a) the total of the premiums or other consideration which, at any time before the transfer of value, has been paid under the policy or contract or any policy or contract for which it was directly or indirectly substituted, less (b) any sum which, at any time before the transfer of value, has been paid under, or in consideration for the surrender of any right conferred by, the policy or contract or a policy or contract for which it was directly or indirectly substituted. (2) Subsection (1) above shall not apply in the case of— (a) the transfer of value which a person makes on his death, or (b) any other transfer of value which does not result in the policy or contract ceasing to be part of the transferor’s estate, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Subsection (1) above shall not apply where the policy is one— (a) under which the sum assured becomes payable only if the person whose life is insured dies before the expiry of a specified term or both before the expiry of a specified term and during the life of a specified person, and (b) which, if that specified term ends, or can, under the policy, be extended so as to end, more than three years after the making of the insurance, satisfies the condition that, if neither the person whose life is insured nor the specified person dies before the expiry of the specified term— (i) the premiums are payable during at least two-thirds of that term and at yearly or shorter intervals, and (ii) the premiums payable in any one period of twelve months are not more than twice the premiums payable in any other such period. (4) Where the policy is one under which— (a) the benefit secured is expressed in units the value of which is published and subject to fluctuation, and (b) the payment of each premium secures the allocation to the policy of a specified number of such units, then, if the value, at the time of the transfer of value, of the units allocated to the policy on the payment of premiums is less than the aggregate of what the respective values of those units were at the time of allocation, the value to be taken under subsection (1) above as a minimum shall be reduced by the amount of the difference. (5) References in subsections (1) and (4) above to a transfer of value shall be construed as including references to an event on which there is a charge to tax under Chapter III of Part III of this Act (apart from section 79), other than an event on which tax is chargeable in respect of the policy or contract by reason only that its value (apart from this section) is reduced.

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168 Unquoted shares and securities.

(1) In determining the price which unquoted shares or unquoted securities might reasonably be expected to fetch if sold in the open market it shall be assumed that in that market there is available to any prospective purchaser of the shares or securities all the information which a prudent prospective purchaser might reasonably require if he were proposing to purchase them from a willing vendor by private treaty and at arm’s length. (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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169 Farm cottages.

(1) In determining the value of agricultural property which includes cottages occupied by persons employed solely for agricultural purposes in connection with the property, no account shall be taken of any value attributable to the fact that the cottages are suitable for the residential purposes of persons not so employed. (2) Expressions used in subsection (1) above and in Chapter II of Part V of this Act have the same meaning in that subsection as in that Chapter.

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170 Leases for life, etc.

Where under section 43(3) above a lease of property is to be treated as a settlement, the value of the lessor’s interest in the property shall be taken to be such part of the value of the property as bears to it the same proportion as the value of the consideration, at the time the lease was granted, bore to what would then have been the value of a full consideration in money or money’s worth.

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171 Changes occurring on death.

(1) In determining the value of a person’s estate immediately before his death changes in the value of his estate which have occurred by reason of the death and fall within subsection (2) below shall be taken into account as if they had occurred before the death. (2) A change falls within this subsection if it is an addition to the property comprised in the estate or an increase or decrease of the value of any property so comprised, other than a decrease resulting from such an alteration as is mentioned in section 98(1) above; but the termination on the death of any interest or the passing of any interest by survivorship does not fall within this subsection.

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172 Funeral expenses.

In determining the value of a person’s estate immediately before his death, allowance shall be made for reasonable funeral expenses.

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173 Expenses incurred abroad.

In determining the value of a person’s estate immediately before his death, an allowance against the value of property situated outside the United Kingdom shall be made for any expense incurred in administering or realising the property which is shown to be attributable to the situation of the property, but the allowance shall not exceed 5 per cent of the value of the property.

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174 Income tax and unpaid inheritance tax.

(1) In determining the value of a person’s estate immediately before his death, allowance shall be made for— (a) any liability for income tax in respect of an offshore income gain, within the meaning of regulations under section 354(1) of the Taxation (International and Other Provisions) Act 2010, arising on a disposal which is deemed, under such regulations (see regulation 34 of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001)), to occur on the death; and (b) any liability to income tax arising under Chapter 8 of Part 4 of the Income Tax (Trading and Other Income) Act 2005 (deeply discounted securities) on a transfer which is treated as taking place by virtue of section 437(2) of that Act. (2) Where in determining the value of a person’s estate immediately before his death a liability for inheritance tax is taken into account, then, if that tax or any part of it is not in the event paid out of the estate, the value of the estate immediately before his death shall be treated as increased by an amount equal to that tax or so much of it as is not so paid.

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175 Liability to make future payments, etc.

Where in determining the value of a person’s estate immediately before his death a liability to make payments or transfer assets under such a disposition as is mentioned in section 262 below is taken into account, the liability shall be computed as if the amount or value of the payments or assets were reduced by the chargeable portion (as defined in that section).

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175A Discharge of liabilities after death

(1) In determining the value of a person's estate immediately before death, a liability may be taken into account to the extent that— (a) it is discharged on or after death, out of the estate or from excluded property owned by the person immediately before death, in money or money's worth, and (b) it is not otherwise prevented, under any provision of this Act, from being taken into account. (2) Where the whole or any part of a liability is not discharged in accordance with paragraph (a) of subsection (1), the liability or (as the case may be) the part may only be taken into account for the purpose mentioned in that subsection to the extent that— (a) there is a real commercial reason for the liability or the part not being discharged, (b) securing a tax advantage is not the main purpose, or one of the main purposes, of leaving the liability or part undischarged, and (c) the liability or the part is not otherwise prevented, under any provision of this Act, from being taken into account. (3) For the purposes of subsection (2)(a) there is a real commercial reason for a liability, or part of a liability, not being discharged where it is shown that— (a) the liability is to a person dealing at arm's length, or (b) if the liability were to a person dealing at arm's length, that person would not require the liability to be discharged. (4) Where, by virtue of this section, a liability is not taken into account in determining the value of a person's estate immediately before death, the liability is also not to be taken into account in determining the extent to which the estate of any spouse or civil partner of the person is increased for the purposes of section 18. (5) In subsection (2)(b) “tax advantage” means— (a) a relief from tax or increased relief from tax, (b) a repayment of tax or increased repayment of tax, (c) the avoidance, reduction or delay of a charge to tax or an assessment to tax, or (d) the avoidance of a possible assessment to tax or determination in respect of tax. (6) In subsection (5) “tax” includes income tax and capital gains tax. (7) Where the liability is discharged as mentioned in subsection (1)(a) only in part— (a) any part of the liability that is attributable as mentioned in section 162A(1) or (5) is, so far possible, taken to be discharged first, (aa) any part of the liability that is attributable as mentioned in section 162AA(1) is, so far as possible, taken to be discharged only after any part of the liability within paragraph (a) is discharged, (b) any part of the liability that is attributable as mentioned in section 162B(1)(b), (3)(b) or (5)(c) is, so far as possible, taken to be discharged only after any parts of the liability within paragraph (a) or (aa) are discharged, and (c) the liability so far as it is not attributable as mentioned in any of paragraphs (a) to (b) is, so far as possible, taken to be discharged only after any parts of the liability within any of those paragraphs are discharged.

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176 Related property etc.—sales.

(1) This section has effect where, within three years after the death of any person, there is a qualifying sale of any property (“the property concerned”) comprised in his estate immediately before his death and valued for the purposes of this Act— (a) in accordance with section 161 above, or (b) in conjunction with property which was also comprised in the estate but has not at any time since the death been vested in the vendors. (2) If a claim is made for relief under this section the value of the property concerned immediately before the death shall be taken to be what it would have been if it had not been determined as mentioned in subsection (1) above. (3) For the purposes of subsection (1) above a sale is a qualifying sale if— (a) the vendors are the persons in whom the property concerned vested immediately after the death or the deceased’s personal representatives; and (b) it is at arm’s length for a price freely negotiated at the time of the sale and is not made in conjunction with a sale of any of the related property taken into account as mentioned in subsection (1)(a) above or any of the property mentioned in subsection (1)(b) above; and (c) no person concerned as vendor (or as having an interest in the proceeds of sale) is the same as or connected with any person concerned as purchaser (or as having an interest in the purchase); and (d) neither the vendors nor any other person having an interest in the proceeds of sale obtain in connection with the sale a right to acquire the property sold or any interest in or created out of it. (4) Subsection (2) above shall not apply unless the price obtained on the sale, with any adjustment needed to take account of any difference in circumstances at the date of the sale and at the date of the death, is less than the value which, apart from this section and apart from Chapter IV of this Part of this Act, would be the value of the property concerned determined as mentioned in subsection (1) above. (5) Where the property concerned consists of shares in or securities of a close company, subsection (2) above shall not apply if at any time between the death and the qualifying sale the value of the shares or securities is reduced by more than 5 per cent as a result of an alteration in the company’s share or loan capital or in any rights attaching to shares in or securities of the company; and for the purposes of this subsection— “alteration” includes extinguishment, and “close company” has the same meaning as in Part IV of this Act.

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177 Scottish agricultural leases.

(1) Where any part of the value of a person’s estate immediately before his death is attributable to the interest of a tenant in an unexpired portion of a lease for a fixed term of agricultural property in Scotland then, subject to subsection (3) below, there shall be left out of account in determining that value any value associated with any prospect of renewal of the lease by — (a) tacit relocation (or any provision in the lease having the same effect as tacit relocation), (b) continuation by virtue of section 4, 8(6) or 8E(1) of the Agricultural Holdings (Scotland) Act 2003, or (c) continuation by virtue of a specified enactment. (2) Where any part of the value of a person’s estate immediately before his death is attributable to the interest of a tenant of agricultural property in Scotland, being an interest which is— (a) held by virtue of— (i) tacit relocation (or any provision in the lease having the same effect as tacit relocation), (ii) continuation by virtue of section 4, 8(6) or 8E(1) of the Agricultural Holdings (Scotland) Act 2003, or (iii) continuation by virtue of a specified enactment, and (b) acquired on the death by a new tenant, then, subject to subsection (3) below, the value of the interest shall be left out of account in determining the value of that estate. (3) Subsections (1) and (2) above shall not apply unless the deceased had been tenant of the property in question continuously for a period of at least two years immediately preceding his death or had become tenant by succession. (4) The value to be left out of account by virtue of subsection (2) above shall not include the value of any rights to compensation in respect of tenant’s improvements. (5) The Treasury may by regulations make provision about relevant interests, corresponding to the provision made by this section in relation to the interest of a tenant in a lease of agricultural property in Scotland. (6) For the purposes of subsection (5), a “relevant interest” is the interest of a tenant in a specified type of lease or tenancy of agricultural property in Scotland forming part of the value of a person’s estate immediately before that person’s death. (7) Regulations under subsection (5) must specify the value which is to be left out of account for the purposes of determining the value of a person’s estate or, as the case may be, part of a person’s estate. (8) Regulations under this section are to be made by statutory instrument. (9) Regulations under this section may make such amendments or repeals of this section as appear to the Treasury to be expedient in consequence of provision made by virtue of subsections (1)(c), (2)(a)(iii) or (5). (10) Regulations under subsections (1)(c), (2)(a)(iii) or (5) may have effect in relation to deaths occurring before the regulations are made. (11) A statutory instrument containing regulations made under this section is subject to annulment in pursuance of a resolution of the House of Commons. (12) In this section— “agricultural property” has the same meaning as in Chapter 2 of Part 5, “enactment” includes an enactment contained in or made under an Act of the Scottish Parliament, “specified” means specified by regulations made by the Treasury.

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178 Preliminary.

(1) In this Chapter— “the appropriate person”, in relation to any qualifying investments comprised in a person’s estate immediately before his death, means the person liable for inheritance tax attributable to the value of those investments or, if there is more than one such person, and one of them is in fact paying the tax, that person; “the loss on sale” means the amount determined in accordance with section 179(1) below; “qualifying investments” means (subject to subsection (2) below) shares or securities which are quoted at the date of the death in question holdings in a unit trust which at that date is an authorised unit trust , shares in an open-ended investment company. . . and shares in any common investment fund established under section 42 of the Administration of Justice Act 1982; “relevant proportion”, in relation to the investments to which a claim relates, or any of them, means the proportion by which the loss on sale is reduced under section 180 below; “sale value”, in relation to any qualifying investments, means their value for the purposes of section 179(1)(b) below; “value on death”, in relation to any qualifying investments, means their value for the purposes of section 179(1)(a) below. (2) Shares or securities which are comprised in a person’s estate immediately before his death and in respect of which listingon a recognised stock exchange ... is suspended at that time shall be qualifying investments for the purposes of this Chapter if they are again so listed ... . . . when they are sold as mentioned in section 179(1) below or exchanged as mentioned in section 184 below. (3) Any reference in this Chapter to the investments to which a claim relates is a reference to all the qualifying investments which, on the making of the claim, are taken into account under section 179(1) below in determining the loss on sale. (4) For the purposes of this Chapter— (a) the personal representatives of the deceased, and (b) the trustees of a settlement, shall each be treated as a single and continuing body of persons (distinct from the persons who may from time to time be the personal representatives or trustees). (5) In any case where, for the purposes of this Chapter, it is necessary to determine the price at which any investments were purchased or sold or the best consideration that could reasonably have been obtained on the sale of any investments, no account shall be taken of expenses (whether by way of commission, stamp duty or otherwise) which are incidental to the sale or purchase.

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179 The relief.

(1) On a claim being made in that behalf by the appropriate person there shall be determined for the purposes of this Chapter the amount (if any) by which— (a) the aggregate of the values which, apart from this Chapter, would be the values for the purposes of tax of all the qualifying investments comprised in a person’s estate immediately before his death which are sold by the appropriate person within the period of twelve months immediately following the date of the death exceeds (b) the aggregate of the values of those investments at the time they were so sold, taking the value of any particular investments for this purpose as the price for which they were so sold or, if it is greater, the best consideration which could reasonably have been obtained for them at the time of the sale. (2) Subject to the following provisions of this Chapter, in determining the tax chargeable on the death in question, the value of the investments to which the claim relates shall be treated as reduced by an amount equal to the loss on sale. (2A) A claim under this Chapter must be made not more than 4 years after the end of the period mentioned in subsection (1)(a). (3) A claim made by the appropriate person under this Chapter shall specify the capacity in which he makes the claim, and the reference in subsection (1) above to qualifying investments which are sold by him is a reference to investments which, immediately before their sale, were held by him in the capacity in which he makes the claim.

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180 Effect of purchases.

(1) If a claim is made under this Chapter and, at any time during the period beginning on the date of the death in question and ending two months after the date of the last sale made as mentioned in section 179(1)(a) above, the person making the claim purchases any qualifying investments in the same capacity as that in which he makes the claim, the loss on sale of the investments to which the claim relates shall be treated for the purposes of section 179(2) above as reduced by the proportion which the aggregate of the purchase prices of all the qualifying investments so purchased bears to the aggregate of the values referred to in section 179(1)(b) above (or, if the aggregate of those purchase prices equals or exceeds the aggregate of those values, the loss on sale shall be extinguished). (2) If a claim is made under this Chapter by any person in a capacity other than that of personal representative or trustee— (a) subsection (1) above shall have effect in his case as if for the words “in the same capacity as that in which he makes the claim” there were substituted the words “otherwise than in the capacity of personal representative or trustee”, and (b) no account shall be taken under that subsection of any qualifying investments purchased by him unless they are of the same description as one of the qualifying investments to which the claim relates. (3) For the purposes of subsection (2) above, two investments, not being investments in an authorised unit trust or common investment fund, shall not be treated as of the same description if they are separately listedon a recognised stock exchange ... and an investment in one authorised unit trust or common investment fund shall not be treated as of the same description as an investment in another authorised unit trust or common investment fund.

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