The main discussion of close company transfers is in Division I6.1, and this is a short summary of the provisions concerning actual or deemed transfers by close companies which affect settlements with an interest in possession. For the definitions of close company and participator, see I6.102. These definitions are similar to the corporation tax definitions, with some modifications.
QIIP consists of close company shares
The legislation1 caters for the situation where shares in a close company are part of settled property subject to a qualifying interest in possession (QIIP) and the close company makes an (actual) transfer of value, ie diminishing the value of its assets or giving them away.
This transfer is apportioned among the participators according to their respective rights and interests in the company2, and there will be a deemed transfer of value for IHT purposes as if the interest in possession had come to an end in a part of the settled property. The value of this part is equal to the amount of the transfer apportioned
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