I am dealing with the tax computations on an estate with EIS investments held for many years but has a couple of quirks.
The first question relates to EIS shares transferred to his wife two years prior to death. I can see that the EIS CGT exemption on these shares will continue by virtue of s245 ITA 2007 which specifically refers to shares transferred during their lifetime wheras if they had transferred to the wife on death the CGT exemption would cease and future gains arising after death would be subject to CGT. As far as I can see this legislation is not affected by the fact that for IHT purposes the gift would technically be chargeable on death (but covered by the spousal exemption). Whilst this was not expected as the deceased died suddenly it seems like a quite successful outcome as this now means any future gains would be CGT free. Is there any flaw in my analysis here?
There were still some EIS shares held by the deceased and the will leaves these to a specific beneficiary not the spouse. Whilst historically these were EIS shares from many years ago the company is now mainly a property investment company as the rental income and activity far outweighs any development activity and therefore I cannot see that these shares qualify for BPR for IHT purposes. But clearly the drafter of the will was relying on BPR for these to be specifically gifted so is there something I’m missing. (the shares are specifically named in the will not by way of a BPR assets clause).