Deceased’s capital gains tax position

Produced by Tolley
Deceased’s capital gains tax position

The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Deceased’s capital gains tax position
  • Capital gains and losses in the year of death
  • Tax-free uplift on death

Capital gains and losses in the year of death

An individual is taxable in the usual way on chargeable gains arising in the tax year of death, which is the period starting with the previous 6 April and ending on the date of death.

The normal computational rules apply to calculate those gains. The full annual exemption and all applicable reliefs are available. The rates of tax are applied in the usual way, with the lower rates of 10%, and 18% for residential property, available to the extent of the unused basic rate band. If the individual dies early in the tax year, income for the year is likely to be lower with the consequence that more of the basic rate band will be available for capital gains.

Remember that the relevant date for capital gains tax is the date of contract. Where death occurs between exchange of contracts and completion, the contract remains valid and the personal representatives (PRs) will complete the sale and receive the proceeds. However, any chargeable gain is attributable to the deceased and not to the PRs.

See the Introduction to capital gains tax guidance note and other notes in that sub-topic of the Personal Tax

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