CG36474 | Death of person with interest in possession: valuation of trust assets

If, in the case described in CG36471, the settled property held by the trustees comprises land, quoted shares and unquoted shares, then, on the complete termination of one of the two life interests, the trustees should be treated as disposing, under Section 72(1), of

i) one half of the land, to be valued at half the market value of the entirety, see CG74240+;

ii) one half of the quoted shares at their market value, see CG59510; and

iii) one half of the unquoted shares, to be valued on the basis of a separate holding or holdings, each comprising half the unquoted shares in each company actually held by the trustees, see CG59540+.

The shares however may be subject to the treatment described in CG36480+.

The basis of valuation of land for Inheritance Tax on death of a life tenant may differ from the basis of valuation of (i) above, but it is considered that TCGA92/S274, see CG32210+, does not apply because the disposal under Section 72(1) is of a notional asset which exists only in the terms of Section 72(5).