Families urged to claim little-known tax relief on inheritance bills
Last week's dip in global stock markets means some families could be in line for a rebate, experts have said.
The amount of inheritance tax paid on assets – including shares – is decided by their value at the date of the original estate holder's death.
But if those assets are sold at a lower price within 12 months by the estate's beneficiary, they can reclaim the difference in tax from HMRC. It is known as 'loss on sale relief', which can be worth thousands of pounds.
Stock markets around the world have stuttered following US president Donald Trump's global tariff war. The S&P 500 index, which tracks large American companies and is incredibly popular with investors, has slipped 8pc since the beginning of 2025, while the Euronext 100 index has fallen more than 4pc during the last 12 months.
Shaun Moore, tax and financial planning expert at advice firm Quilter, said: 'The standard rate of inheritance tax is 40pc, so a significant drop in share value can lead to substantial refunds.
'For example, a £20,000 drop in share value could result in an £8,000 reduction in tax owed. Given the recent volatility in the stock market, this relief is particularly relevant and could be music to many executors' ears. [They] should monitor the market value of shares and consider the timing of sales to maximise potential relief.'
Loss on sale relief only applies to qualifying investments, which include listed shares and securities, including those listed on foreign stock exchanges, along with holdings in authorised unit trusts. Stocks on the Alternative Investment Market (Aim) are not eligible for the relief.
But anybody considering selling shares in order to take advantage of loss on sale relief should take into account the stock market's volatility and the possibility that their value may increase again, warned Quentin Holt of tax advice firm Blick Rothenberg.
Mr Holt said: 'A decision would need to be made on whether to sell qualifying investments against the background of the current volatility in the stock market, given the rebound in stock prices in recent days, and how far through the 12-month period after death the estate is.
'Care should be taken before committing to any sales and an individual's wider investment strategy should always be considered.'
In order to be eligible for loss on sale relief, all shares in the estate sold within 12 months of date must incur a net loss, Mr Holt added.
'It is not possible to pick and choose so if some shares in the estate are sold at a profit, this will reduce the figure on which relief can be claimed. It is possible to make a provisional claim before the 12-month period has elapsed.'
Anybody hoping to take advantage of loss on sale relief must make their claim to HMRC within four years of the end of the 12-month period following the date of the estate holder's death.
Mr Moore added: 'Claims must be submitted using the official HMRC form – IHT35 – and supported by documentation that includes the value of the shares at death and the actual sale prices.
'For anyone hoping to use the relief, accurate record-keeping is essential. Executors must maintain detailed records of share values at death and sale prices. Ensure all claims are supported by the necessary documentation and submitted within the specified time frame.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Scottish Sun
2 hours ago
- Scottish Sun
Inside ‘secret' plans to turn iconic Glasgow building into ‘one of Europe's finest hotels'
It's one of Glasgow's biggest American-Classical-style commercial buildings UNDER WRAPS Inside 'secret' plans to turn iconic Glasgow building into 'one of Europe's finest hotels' Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) PLANS are in progress to transform an iconic Glasgow building into one of Europe's "finest" hotels. The B-listed 95 Bothwell Street building in the city centre is understood to be mostly empty. Sign up for Scottish Sun newsletter Sign up 1 Plans have been lodged with Glasgow City Council to transform 95 Bothwell Street Credit: Google Maps It's one of Glasgow's biggest American Classical-style commercial buildings. Proposals to turn it into a 235-room hotel have been submitted to the council. But details about the hotel company eyeing to take over the building have been kept under wraps. A statement about the proposed design read: 'The proposed confidential hotel operator is particularly excited about the potential provided by the building to create a best-in-class hotel of distinction, which they anticipate will be one of the finest in their operator's European portfolio. 'The listed building is soon to become entirely unoccupied. The commercial office use for which the building was built and designed is no longer viable. "The building has early indications of corrosion of the structural steel frame, which needs to be addressed to prevent damage to the significant external masonry façade. 'The proposed development is conservation-led and will integrate and repurpose the significant parts of the listed building into the new hotel use, whilst retaining its external appearance and presence within the street.' HFD Property Group Limited has lodged a planning permission request to alter the use of the building from 'offices at upper floors and restaurant/cafe and retail on ground floor to hotel". The proposals also include constructing a two-storey roof extension. Glasgow City Council is considering the application.
Scottish Sun
2 hours ago
- Scottish Sun
HMRC sacks dozens of staff for snooping on taxpayers and accessing their records without permission
One employee was sacked in 2023 having sent the data of 100 people to his personal email address AX RUMBLE HMRC sacks dozens of staff for snooping on taxpayers and accessing their records without permission Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) HM Revenue and Customs has sacked dozens of workers after they spied on taxpayers and accessed their records without permission. Fifty workers were let go last year for breaking data privacy rules. Sign up for Scottish Sun newsletter Sign up 2 The HMRC says it takes the issue of data security 'extremely seriously' Credit: Getty Since 2022, a total of 354 employees have been disciplined for data security breaches, with 186 having been fired. The tax office has admitted that some of those that were dismissed were found to have looked up taxpayers' confidential information. HMRC holds a huge amount of personal data about taxpayers, including address, salaries and National Insurance numbers. Staff are banned from looking up sensitive information unless they have a genuine business reason. Despite that, a number of employees have been caught accessing personal details using HMRC's IT system. Figures for 2024-25 indicate 96 staff were disciplined for data security breaches, with 50 of those later being dismissed. The information was revealed to The Telegraph following a Freedom of Information request. According to HMRC, that represents less than 0.1 percent of its almost 68,000 employees. The figure is down from the previous year when 138 employees were disciplined and 68 were let go. Those figures cover all data security breaches and not just employees searching for taxpayers' details. HMRC using AI to scan social media for tax evasion investigations These include things like making changes to records without authorisation, losing sensitive documents or not securely disposing of inadequately protected devices. One employee was sacked in 2023 having sent the data of 100 people to his personal email address. The employee was visiting a business as part of a compliance check and he emailed himself a PDF file which contained a list of staff members' details, which included their salaries and National Insurance numbers. The file was later printed off for the meeting using his home computer, according to court documents. The analytics team, which is responsible for highlighting data breaches, then flagged the incident to his line manager and the employee was dismissed for gross misconduct after an investigation was launched. The case was taken to an employment tribunal with the former employee claiming he had not been thinking clearly at the time due to anxiety. The tribunal though threw out his claim for wrongful dismissal. A HMRC manager who was cited in the tribunal claimed data breaches had been on the rise since the pandemic due to remote working. The line manager of the claimant wrote an email to staff reminding them never to send personal data outside the tax office's systems. It said: 'There have been more incidents of this recently as we are working from home a lot more since Covid, but never send anything to your own private email address to print off that contains any personal or business data.' Former HMRC inspectors said the importance of data security was drilled into employees from their very first day. Ronnie Pannu, from the advice firm Pannu Tanu told the paper: 'When I was in HMRC, there was always a strong message from above that viewing a taxpayer's records where this was not necessary for a particular purpose was a serious issue which could have serious consequences for the individual concerned.' John Hood, from the accountancy firm Moore Kingston Smith said: 'Any HMRC employee foolish enough to look up personal information that is not part of their usual responsibilities faces a ticking time bomb as most searches are tracked. 'As an additional security, some parts of the system are restricted so that only specifically authorised personnel can access them, such as the departments dealing with MPs and civil servants'. All HMRC employees are given mandatory data security training and the government body limits access so workers can only look up customer record if it necessary for their specific role. The tax office also tracks activity on its systems in order to deter record breaches and deter misuse. Any employee who breaks the rules is investigated and faces having penalties imposed on them but each incident is dealt with on a case-by-case basis. Ellen Milner, from the Chartered Institute of Taxation added that taxpayers must be able to trust that the private information they supply will not be leaked or supplied to criminals. Any serious data breach must be reported to the Information Commissioner's Office. There were six cases last year of employees changing customer records without permission. Another two staff lost inadequately protected devices, according to the HMRC's annual report. The HMRC is currently under mounting pressure to strengthen its data security as online criminal attacks become more sophisticated and it moves towards being a digital-first organisation. In the past year some 100,000 taxpayers had been affected by phishing attacks. Criminals used stolen credentials to access their accounts and claim rebates. There was no financial loss to any individual and a number of arrests have been made. It cost the taxpayer £47million though. A spokesperson for HMRC said: 'Instances of improper access are extremely rare, and we take firm action when it does happen, helping prevent a recurrence. 'We take the security of customers' data extremely seriously and we have robust systems to ensure staff only access records when there is a legitimate business need.' It comes after the HMRC revealed it uses AI to spy on workers' social media posts as part of a tax crackdown. The tax authority has been using the technology to look at internet posts that might provide evidence of cheating tax bills, An HMRC spokesperson has insisted the tools are only being used for social media monitoring in criminal investigations and it won't affect the average taxpayer. They said there are "robust safeguards in place" and it's believed that social media monitoring has been used for a number of years. But concerns have been raised about whether the technology could be used more widely in future. HMRC also looks at workers's financial records, spending habits and tax returns to look for evidence of cheating.
The Sun
2 hours ago
- The Sun
HMRC sacks dozens of staff for snooping on taxpayers and accessing their records without permission
HM Revenue and Customs has sacked dozens of workers after they spied on taxpayers and accessed their records without permission. Fifty workers were let go last year for breaking data privacy rules. Since 2022, a total of 354 employees have been disciplined for data security breaches, with 186 having been fired. The tax office has admitted that some of those that were dismissed were found to have looked up taxpayers' confidential information. HMRC holds a huge amount of personal data about taxpayers, including address, salaries and National Insurance numbers. Staff are banned from looking up sensitive information unless they have a genuine business reason. Despite that, a number of employees have been caught accessing personal details using HMRC's IT system. Figures for 2024-25 indicate 96 staff were disciplined for data security breaches, with 50 of those later being dismissed. The information was revealed to The Telegraph following a Freedom of Information request. According to HMRC, that represents less than 0.1 percent of its almost 68,000 employees. The figure is down from the previous year when 138 employees were disciplined and 68 were let go. Those figures cover all data security breaches and not just employees searching for taxpayers' details. HMRC using AI to scan social media for tax evasion investigations These include things like making changes to records without authorisation, losing sensitive documents or not securely disposing of inadequately protected devices. One employee was sacked in 2023 having sent the data of 100 people to his personal email address. The employee was visiting a business as part of a compliance check and he emailed himself a PDF file which contained a list of staff members' details, which included their salaries and National Insurance numbers. The file was later printed off for the meeting using his home computer, according to court documents. The analytics team, which is responsible for highlighting data breaches, then flagged the incident to his line manager and the employee was dismissed for gross misconduct after an investigation was launched. The case was taken to an employment tribunal with the former employee claiming he had not been thinking clearly at the time due to anxiety. The tribunal though threw out his claim for wrongful dismissal. A HMRC manager who was cited in the tribunal claimed data breaches had been on the rise since the pandemic due to remote working. The line manager of the claimant wrote an email to staff reminding them never to send personal data outside the tax office's systems. It said: 'There have been more incidents of this recently as we are working from home a lot more since Covid, but never send anything to your own private email address to print off that contains any personal or business data.' Former HMRC inspectors said the importance of data security was drilled into employees from their very first day. Ronnie Pannu, from the advice firm Pannu Tanu told the paper: 'When I was in HMRC, there was always a strong message from above that viewing a taxpayer's records where this was not necessary for a particular purpose was a serious issue which could have serious consequences for the individual concerned.' John Hood, from the accountancy firm Moore Kingston Smith said: 'Any HMRC employee foolish enough to look up personal information that is not part of their usual responsibilities faces a ticking time bomb as most searches are tracked. 'As an additional security, some parts of the system are restricted so that only specifically authorised personnel can access them, such as the departments dealing with MPs and civil servants'. All HMRC employees are given mandatory data security training and the government body limits access so workers can only look up customer record if it necessary for their specific role. The tax office also tracks activity on its systems in order to deter record breaches and deter misuse. Any employee who breaks the rules is investigated and faces having penalties imposed on them but each incident is dealt with on a case-by-case basis. Ellen Milner, from the Chartered Institute of Taxation added that taxpayers must be able to trust that the private information they supply will not be leaked or supplied to criminals. Any serious data breach must be reported to the Information Commissioner's Office. There were six cases last year of employees changing customer records without permission. Another two staff lost inadequately protected devices, according to the HMRC's annual report. The HMRC is currently under mounting pressure to strengthen its data security as online criminal attacks become more sophisticated and it moves towards being a digital-first organisation. In the past year some 100,000 taxpayers had been affected by phishing attacks. Criminals used stolen credentials to access their accounts and claim rebates. There was no financial loss to any individual and a number of arrests have been made. It cost the taxpayer £47million though. A spokesperson for HMRC said: 'Instances of improper access are extremely rare, and we take firm action when it does happen, helping prevent a recurrence. 'We take the security of customers' data extremely seriously and we have robust systems to ensure staff only access records when there is a legitimate business need.' It comes after the HMRC revealed it uses AI to spy on workers' social media posts as part of a tax crackdown. The tax authority has been using the technology to look at internet posts that might provide evidence of cheating tax bills, An HMRC spokesperson has insisted the tools are only being used for social media monitoring in criminal investigations and it won't affect the average taxpayer. They said there are "robust safeguards in place" and it's believed that social media monitoring has been used for a number of years. But concerns have been raised about whether the technology could be used more widely in future. HMRC also looks at workers's financial records, spending habits and tax returns to look for evidence of cheating. 2
