Inheritance Tax Act 1984 section 140

Interpretation

Section 140 provides the definitions and interpretation rules that apply throughout Chapter 4, which deals with transfers within three years before death, and sets out how market value is to be determined for the purposes of that chapter.

• Key terms used in the relief provisions are defined: "close company" takes its meaning from Part IV of the Act, "interest in land" excludes mortgages and other security interests, and "shares" includes securities.
• The expressions "the relevant date", "the transferee" and "the transferred property" all take their meaning from section 131(1), which establishes the framework for the relief on transfers within three years before death.
• Market value is defined as the price property might reasonably be expected to fetch on an open market sale, without any discount for flooding the market by selling the entire holding at once.
• For unquoted shares, the market value must be determined on the assumption that a prospective purchaser has access to all the information a prudent buyer would reasonably require when negotiating a private purchase at arm's length from a willing seller.