IHT 35 only for estates?

This relates to a life interest trust. The life tenant died, resulting in an IHT event. The trust fund assets comprised of shares which were valued at the date of death, which subsequently fell in value when sold. The sale is within 12 months of the date of death. The trust fund is liable for IHT.

The estate is being dealt with separately, by the life tenant’s representatives.

Can form IHT 35, Claim for relief– loss on sale of shares be submitted on behalf of the trust?

Parveen Haynes
Gordons Solicitors

The reliefs for “losses” [IHTA 1984 ss 178 -198] apply not only to sales by PRs (perhaps the most common category) but also where trustees of trusts containing a qualifying interest in possession effect sales following life tenant’s death.

So the answer to your question is “yes”. Relief [under IHTA 1984 s 179] is available for losses arising on sales by the Trustees of the life interest trust (assuming sale within 12 months, shares are quoted etc).

The trustees would be an “appropriate person” as they are primary liable for paying any IHT liability arising on the shares in which the interest subsists at the date of death [IHTA 1984 s 178(1)].

Malcolm Finney

Welcome Parveen. The answer to your question is yes you can use IHT35. In fact in the guidance notes it states “ Only make a claim for relief if you’re the ‘appropriate persons’. The ‘appropriate persons’ are those liable for the Inheritance Tax (IHT) on the value of the shares or securities. For example, the executors, the administrators, trustees or donees. If more than one group of people is liable for the tax, the ‘appropriate persons’ are those who are actually paying it. Tell us the capacity in which you’re signing the form. All appropriate persons must sign this form”

Patrick Moroney
BWL Solicitors

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Dear Patrick,

Thank you for your email and for confirming, much appreciated.

Best regards,

Parveen Haynes
Gordons Solicitors