Inheritance Tax Act 1984 section 180

Effect of purchases

Section 180 reduces or eliminates the loss relief available under Chapter 3 where the claimant purchases qualifying investments during the period from the date of death to two months after the last qualifying sale, thereby preventing "bed-and-breakfast" transactions designed to create artificial losses.

• Where a claimant purchases qualifying investments between the date of death and two months after the last qualifying sale, the allowable loss is reduced by the ratio of total purchase prices to total sale values
• If the total value of purchases equals or exceeds the total value of sales, the loss relief is extinguished entirely
• For personal representatives and trustees, the restriction applies to purchases of any qualifying investments made in the same capacity as the claim; for other claimants, it only applies to purchases of investments of the same description as those included in the claim
• Two investments are not treated as being of the same description if they are separately listed on a recognised stock exchange, and an investment in one authorised unit trust or common investment fund is not treated as the same description as an investment in another such trust or fund