Inheritance Tax Act 1984 section 97

Transfers within group, etc.

Section 97 deals with how minority shareholders in a close company are treated when the company transfers an asset to another member of its group and this gives rise to a transfer of value for inheritance tax purposes.

• Where a close company that is a non-principal member of a group transfers an asset to another group member (under the capital gains tax no-gain/no-loss rules), and the transfer also constitutes a transfer of value, the minority participators may be excluded from the apportionment of that value.
• The exclusion applies where the transfer of value has only a small effect on the value of the minority participators' rights and interests compared with its effect on the other participators' rights and interests.
• A minority participator is defined as a participator in the transferor company who is not, and is not connected with, a participator in the principal company of the group or any of the principal company's own participators.
• The definition of a group of companies follows the same meaning as in sections 170 to 181 of the Taxation of Chargeable Gains Act 1992.