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I3.251 Reduction in transferor's estate generally

A number of examples of the basic rule concerning loss to the estate are given here — see IHTM04055 and IHTM04056 for further examples. It must be remembered that the value transferred by a transfer of value is measured by the loss to the transferor's estate and not by the increase in value of the transferee's estate. The two amounts may differ widely where, for example, a number of assets taken together, such as a majority holding of shares in a company, have a greater value than the sum of the values of each taken separately.

Examples 1

If A has 60% of the shares in a company and B has 40%, the transfer by A to C of one-third of his holding (20% of the shares of the company) will give C simply a minority holding in the company. On the other hand A will have lost control of the company so that the loss he sustains will be greater than the value of