Inheritance Tax Act 1984 section 178

Preliminary

Section 178 sets out the key definitions and rules that underpin the relief available when qualifying investments held in a deceased person's estate are sold at a loss within the permitted period after death.

• Qualifying investments include quoted shares and securities, authorised unit trust holdings, open-ended investment company shares, and common investment fund shares that formed part of the estate at death — but not unquoted shares or AIM-traded shares.
• The appropriate person — the one who must make the claim and carry out the sale — is the person liable for the inheritance tax on those investments, typically the personal representatives or trustees, but sometimes a specific legatee bearing the tax.
• Shares or securities whose listing was suspended at the date of death can still qualify, provided they are once again listed or dealt in at the point they are sold or exchanged.
• Incidental costs of sale or purchase, such as commission or stamp duty, are ignored when determining the price at which investments were bought or sold, or the best consideration reasonably obtainable.