Inheritance Tax Act 1984 section 133

Shares - capital receipts

Section 133 deals with how capital payments received in respect of transferred shares before the date of death (or sale) affect the relief available under section 131 for lifetime transfers made within three years before death.

• Where transferred shares generate a capital payment before the relevant date, the market value of the shares on that date is increased by the amount of the payment for the purposes of calculating relief.
• The increase does not apply if the market value of the shares already reflects the right to receive the capital payment.
• If the transferee or their spouse or civil partner receives a provisional allotment of shares (such as a rights issue) and sells those rights before the relevant date, the sale proceeds are treated as a capital payment.
• A capital payment is defined as any money or money's worth that does not constitute income for income tax purposes.