IHT related property rules

[Rows Mum]

Hello
Is anyone able to advise on the position where an individual, and a trust in which he has a qualifying interest in possession, both own shares in the same private company? Taken together, the two holdings amount to more than 50% of the issued share capital and voting rights. Presumably the shareholdings are valued as one controlling shareholding in terms of IHTA section 49 and the related property provisions? If the individual wishes to try to mitigate his IHT exposure by reducing the shareholding below 50%, does it matter where the shares are gifted from, or is there a benefit in gifting them from the trust? The recipients would be the same in either case. Thank you.

[maths]

The related property rules are not in point. However, for valuation purposes the shares held by the individual in his own capacity may need to be aggregated with those shares held in trust in which he has a qualifying interest in possession.

The individual could gift some or all of his shares to anyone. The value of the gift would involve (the loss to the individual's estate principle) including the value of the interest in possession's interest in the trust shares. This would be a PET.

The trustees could terminate the interest in possession beneficiary's interest in all or some of the trust property (ie the shares) in favour of one or more of the trust beneficiaries. This would give rise to a PET on the part of the interest in possession beneficiary. However, in this case the value of the trust property in which the interest is terminated is not valued on the loss in the beneficiary's estate principle but simply the value of the trust property terminated (which will arguably be less).