IHTM18091 | Stocks and shares: valuation: basis of valuation

Like other property, listed investments have to be valued for Inheritance Tax (IHT) purposes at the price they would fetch in the open market (IHTM09703) (IHTA84/S160).

The general valuation rule is that you will apply the price shown in the relevant Stock Exchange list. This reflects

• the fact that prices are fixed by reference to normal dealings in holdings of marketable size, and

• that valuation by reference to marketable lots is the proper basis for IHT purposes (Buccleuch v IRC [1967] 1 AC 506) - see IHTM09715. No allowance is made for the effect of flooding the market.

The value is the gross sale price, without deducting brokers fees or stamp duty charges.

The appropriate value is that ascertained as at the date of death (IHTA84/S4(1)), even though the price may have risen or fallen before the investments could actually be sold. Loss on sale of shares relief (IHTM34001) may be available on losses made within one year of death.