The following Private Client guidance note provides comprehensive and up to date legal information covering:
The rules dealing with capital gains tax (CGT) on death provide that:
assets that the deceased was competent to dispose of are deemed to be acquired by the personal representatives (PRs), or any other person on whom they devolve, at their market value at the date of death but are deemed not to have been disposed of by the deceased, meaning that:
death is not a disposal for CGT purposes and no CGT arises as a result of the individual’s death, but
the assets acquire a new base value for CGT purposes, ie any unrealised pre-death gains are effectively wiped out and assets that have risen in value since their original acquisition by the deceased are given a tax-free uplift for the calculation of future gains in the hands of the PRs or beneficiaries of the deceased’s estate, and this applies also to the deceased's interest in joint property
allowable losses incurred by the deceased in the tax year of death may be set against gains accruing in the year of death or the three preceding years
If PRs sell an asset in the administration period, they are liable for any CGT on any gains realised after deduction of any losses they incur on their disposal.
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