One of the conditions for relief is that the transferred asset is retained by the transferee (or their spouse or civil partner (IHTM11032)) until the death of the transferor or an earlier qualifying sale.

So the relief could be lost if the asset consists of a holding of shares which becomes a different holding, as a result of a reorganisation of share capital for example. IHTA/S135 preserves relief if the ‘new’ holding results from a transaction to which TCGA92/S127 applies or would apply but for TCGA92/S134

Broadly, this covers

a reorganisation of share capital within TCGA92/S126(1)

a conversion of securities within TCGA92/S132

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