Scotland: distribution of estate

mybestattempt

MaskingTape said:

Thanks all, you've been very helpful.

It has been suggested that as the total estate is of relative low value (lets say £250k), CGT does not arise.

My reading is that as the house sold for c. 30k above the probate valuation CGT is due on that capital gain.

I understand there are  allowances and fee costs that can be set against that; but I don't believe that removes the CGT obligation.

Does anyone have more information? I can't find any reference online that refers to the total value of the estate.

The suggestion is wrong and you are correct, so the reason you can't find anything to support that suggestion is because it's incorrect.

The total value of the whole estate at date of death is not relevant.

The disposal of any asset/property from the estate for more than it's probate/date of death value will give rise to a capital gain:

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg10240

RAS

There are also shares to be sold?

So there may be an increased or decreased CGT liability depending on whether the shares are worth more or less than assessed at probate.

I think there was another poster here whose CGT liability was almost wiped out by the loss on shares.

MaskingTape

Thanks again.

I can't say if there was much of a loss or gain re shares - for probate they were valued less than 2k.

Update: there's a small gain of around £400.

But regardless of the overall outcome re the final amount of CGT , I believe the solicitor should have filed returns in a timely manner.

tooldle

MaskingTape said:

Thanks again.

I can't say if there was much of a loss or gain re shares - for probate they were valued less than 2k.

But regardless of the overall outcome re the final amount of CGT , I believe the solicitor should have filed returns in a timely manner.

Is it possibly HMRC confirmation that is holding things up? I’ve been waiting since December last year. In my case CGT and estate earnings have been reported. 

MaskingTape

Is it possibly HMRC confirmation that is holding things up? I’ve been waiting since December last year. In my case CGT and estate earnings have been reported. 

I doubt it. From the correspondence the Solicitor thinks this [CGT]  is "new legislation".

jem16

MaskingTape said:

Is it possibly HMRC confirmation that is holding things up? I’ve been waiting since December last year. In my case CGT and estate earnings have been reported. 

I doubt it. From the correspondence the Solicitor thinks this [CGT]  is "new legislation".

The only mention of £250k that I could find is in the informal reporting of estate income rules. Still doesn’t negate the need for CGT though. 

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem7410

Silvertabby

RAS said:

Your case involves charities. The executors need to be absolutely sure there is no possible challenge there before looking at the residual estate.

This is why our solicitor strongly recommended that we leave £X to charities, not £%.  

MaskingTape

Latest update from the Solicitor is that the property was sold "before the new legislation was brought in". And therefore CGT doesn't apply.

Sale completed in Feb 2025 - hope they are right!

jem16

MaskingTape said:

Latest update from the Solicitor is that the property was sold "before the new legislation was brought in". And therefore CGT doesn't apply.

Sale completed in Feb 2025 - hope they are right!

Solicitor is talking nonsense i think. House sold for £30k about probate value. I cannot see why CGT would not apply.

MaskingTape

Well, thats in writing now, so if they are wrong its down to them.