Inheritance Tax Act 1984 section 184

Exchanges

Section 184 deals with the treatment of exchanges of qualifying investments from a deceased's estate within twelve months of death, ensuring that exchanges where values have risen are treated as sales to prevent manipulation of the loss relief provisions.

• If qualifying investments are exchanged within twelve months of death and their market value at the date of exchange exceeds their value at the date of death, the exchange is treated as a sale at that higher market value.
• This deemed sale treatment applies regardless of the nature of the property received in exchange, including where an equalisation payment is made as part of the exchange.
• The section does not apply where the exchange arises from a reorganisation of share capital, conversion of securities, or certain issues of shares or debentures, as these are already dealt with separately under section 183.
• The purpose of this provision is to prevent the artificial creation of losses by selling investments that have fallen in value while exchanging those that have risen, thereby manipulating the relief available under this Chapter.