IHTM30216 | Transfers on death: meaning of 'unquoted' for instalments

The meaning of the term ‘unquoted’ for instalment purposes has not been constant and has diverged from the general definition provided by IHTA84/S272 as introduced by the FA 1987 with effect from 17 March 1987.

With effect from 1 April 1996 the word ‘quoted on a recognised stock exchange’ in IHTA84/S227 (1AA) and in IHTA84/S272 was replaced by the word ‘listed’. The term ‘recognised stock exchange’ was defined by TA88/S841, but with effect from 28 November 2001 HMRC adopted a revised interpretation. For further information see IHTM18131.

From 6 April 2026, “recognised stock exchange” takes its meaning from the Income Tax Acts (see IHTA84/S272).

The point will rarely arise in practice because:

• From 6 April 2026, unquoted shares in companies listed on a market that does not meet the definition of ‘listed’ for HMRC purposes (such as AIM), can now only qualify for 50% Business Relief (BR), but will also qualify for interest free instalments (IHTA/S227(2)(aa) and IHTA/S234(1)(a)). Other unquoted shares get relief at 100% subject to the availability of 100% relief allowance (see IHTM25500). If all or part of the value attracts relief at 50% then interest free instalments are available.

• From 1 April 1996 to 5 April 2026, all unquoted shares qualified for 100% Business Relief unless they fell within IHTA84/S105 (3). If they fell within that section, or were as described in IHTA84/S105 (4) (see IHTA84/S234 (2) and IHTA84/S234 (3)(a)), they only qualified for interest free (IHTM30363) instalments to the extent that the value is treated as reduced by Agricultural Relief (IHTM24000).

The exception in both cases is where the unquoted shares would have qualified for BR but for the provisions of IHTA84/S106, i.e. they were not owned by the transferor throughout the two years immediately preceding the date of transfer. In this case the shares will nevertheless qualify for interest free instalments.