Estates—income tax and CGT

Practice notes

Capital gains tax issues on death

STOP PRESS: The Office of Tax Simplification published its first report on the review of capital gains tax (CGT) on 11 November 2020. The report...

9th Apr

Practice notes

Estate tax returns and informal procedures

Is a tax return required?Personal representatives (PRs) have a duty to report to HMRC any untaxed income received during the period of administration...

9th Apr

Practice notes

Finalising the deceased's tax affairs with HMRC

The personal representatives (PRs) are responsible for finalising the deceased's tax affairs. They must file outstanding tax returns and claim any...

9th Apr

Practice notes

Tax treatment of income received by beneficiaries under a Will

On an individual's death, the personal representatives (PRs) will generally wish to calculate and settle the inheritance tax (IHT) liability in order...

9th Apr

Practice notes

Estate Registration Service

HMRC's online Trust Registration Service (TRS) was designed to implement the Money Laundering, Terrorist Financing and Transfer of Funds (Information...

9th Apr

Practice notes

Taxation of trusts and estates—trading income

It is possible for trustees or personal representatives to be trading. For example, if a self-employed trader dies, the personal representative might...

Produced in partnership with Paul Davies of Clarke Willmott 9th Apr

Practice notes

Taxation of trusts and estates—property income

It is common for trustees or personal representatives (PRs) to run a property business. A property business is one which generates income from land...

Produced in partnership with Paul Davies of Clarke Willmott 9th Apr

Practice notes

The deceased's tax position

This Practice Note was originally produced in partnership with Tolley.When an individual dies, their estate is liable to income tax on the income that...

9th Apr

Practice notes

CGT—PPR relief for trusts and estates

FORTHCOMING CHANGE: On 14 July 2020, the Office of Tax Simplification (OTS) published its online survey and a call for evidence to seek views about...

9th Apr

Practice notes

Tax treatment of capital received by beneficiaries under a Will

STOP PRESS: The Office of Tax Simplification (OTS) published its first report on the review of capital gains tax (CGT) on 11 November 2020. The report...

8th Apr

Practice notes

Income tax and capital gains tax during administration

When the estate of a deceased individual is being administered, the assets will often generate income and sometimes gains will accrue. The period of...

1st Apr

In-house

Q&As

Where executors have sold an asset subject to a specific legacy at a gain, in the absence of a formal Assent, is the legatee entitled to the full proceeds of sale without any deduction for capital gains tax?

We have assumed that the legacy in question is a gift of personalty.Assets of which the deceased was competent to dispose are deemed to be acquired by...

22nd Mar

Q&As

A charity becomes absolutely entitled to the trust fund (comprised of shares) on the death of the life tenant. If a chargeable gain on the shares arises between the date of death of the life tenant and the date of sale, can the trustees of the life interest trust appropriate the shares to the charity so that it can sell the shares without incurring a chargeable gain? Is there a precedent for appropriation by trustees?

We refer you to the Practice Note: Tax treatment of capital received

1st Mar

Q&As

Are there any issues to be aware of if the executors of an estate appropriate a property subject to a mortgage to a beneficiary before the property is sold in order to be able to offset the beneficiary’s losses against a capital gain arising on the sale?

It may be preferable for personal representatives (PRs) to transfer or ‘appropriate’ an estate asset to a beneficiary before selling it in order to...

26th Feb

Q&As

When distributing a residuary estate, if one beneficiary is taking shares as part of their share of the residue, do they take these shares at the value given at date of death or the value at the date of distribution?

This Q&A covers the valuation of property received by a beneficiary for capital gains tax (CGT) purposes.All the deceased's assets of which he is...

15th Feb

Q&As

How is a contingent pecuniary legacy, which does not carry the intermediate income, taxed from an income tax, CGT and IHT perspective?

This Q&A looks at whether it is possible to vary this type of a legacy by deed of variation so that it is expressed so as to carry the intermediate...

Produced in partnership with Piers Feltham of Radcliffe Chambers 15th Feb

Q&As

A French born intestate deceased was domiciled and paid tax in the UK. The majority of their assets (all but £700) are held in France. Would income and CGT on the estate be payable in the UK and in the absence of a UK administrator who is liable to declare same?

For the purpose of this Q&A it is assumed that:•the deceased died in the UK•the party who has submitted the query is acting for the heirs of the...

15th Feb

Q&As

An individual A died in 2008 and their spouse B was sole executor of the estate and partially administered without taking out a grant. Following B's death, the replacement executor named in A's Will renounced probate. A specific legacy was paid out of A's estate but the residue remains due to B (now B's estate). Who is able to obtain a grant in relation to A's unadministered estate? How should the value of A's assets at the date of death be ascertained given the lapse of time?

The need for a grant of probateThe duty of executors is to collect and get in the real and personal estate of the deceased and administer it according...

12th Feb

Q&As

Is the right to occupy a property (left by Will) an interest in possession if the occupier is not entitled to income? Are the personal representatives of an estate entitled to principal private residence relief from capital gains tax where the individual occupying the property only has a right to reside and not an interest in possession?

Interest in possession—definitions for trust and tax law purposesThe interest in property of a beneficiary interested under a trust may be a fixed...

22nd Jan

Q&As

Can a deed of variation falling within section 142 of the Inheritance Tax Act 1984 and section 62(6) of the Taxation of Chargeable Gains Act 1992 be used to redirect property which is settled on immediate post-death interest trusts in a Will and, if so, can such a deed be used to create a legacy of the testator’s untransferrable residence nil rate band, as if such a legacy had been included within the Will?

A deed of variation which complies with section 142 of the Inheritance Tax Act 1984 (IHTA 1984) and section 62(6) of the Taxation of Chargeable Gains...

22nd Jan

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