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Estate Capital Gains Tax - Whose Allowance?

I've had a search on here/Google but couldn't find the answer.

I am executor of my mother's estate, along with my brother. We are also both the main (but not sole) beneficiaries. We sold my mother's house as part of the estate and have paid the relevant CGT as it increased in value between DoD and sale. We used £3k personal allowance to calculate the CGT as the house was still in my mother's name when sold.

She also has shares to sell, which have increased in value since DoD. I understand that I cannot use the estate £3k personal allowance to sell these until the next tax year. However, if they were transferred into mine/my brother's name and we sold them within this tax year, could either of us use our own £3k personal allowance? They have only increased by approx. £1k.

I'm struggling to understand whether the £3k 'estate' personal allowance counts as either my brother's or mine, or whether is it separate and we still have our own personal allowance for this tax year? The CGT bill for the house says that I need to declare the charge when I complete my own personal Self-Assessment, which I'm struggling to understand as the charge was for the estate and not my own personal finances. 

All help appreciated. I'd like to sell the shares this tax year if I can (transferring into mine/my brother's name first) but I can wait until April if needed to avoided paying CGT on the gain.

Comments

  • Keep_pedalling
    Keep_pedalling Posts: 21,439 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    It is separate to your personal allowances. 
  • poseidon1
    poseidon1 Posts: 1,787 Forumite
    1,000 Posts Second Anniversary Name Dropper
    doodle483 said:
    I've had a search on here/Google but couldn't find the answer.

    I am executor of my mother's estate, along with my brother. We are also both the main (but not sole) beneficiaries. We sold my mother's house as part of the estate and have paid the relevant CGT as it increased in value between DoD and sale. We used £3k personal allowance to calculate the CGT as the house was still in my mother's name when sold.

    She also has shares to sell, which have increased in value since DoD. I understand that I cannot use the estate £3k personal allowance to sell these until the next tax year. However, if they were transferred into mine/my brother's name and we sold them within this tax year, could either of us use our own £3k personal allowance? They have only increased by approx. £1k.

    I'm struggling to understand whether the £3k 'estate' personal allowance counts as either my brother's or mine, or whether is it separate and we still have our own personal allowance for this tax year? The CGT bill for the house says that I need to declare the charge when I complete my own personal Self-Assessment, which I'm struggling to understand as the charge was for the estate and not my own personal finances. 

    All help appreciated. I'd like to sell the shares this tax year if I can (transferring into mine/my brother's name first) but I can wait until April if needed to avoided paying CGT on the gain.
    The estate has its own CGT exemption in the tax year of death and 2 tax years thereafter.

    Sounds as if the property sale has used the current year's exemption.

    Accordingly, assuming the shareholdings are not needed for the continued administration of the estate, it would be sensible  to transfer all shareholdings out of the estate into  your own personal names and then make use of your own  CGT exemptions to avoid tax going forward.

    Incidentally the gain on the property sale is to be reported on the estate tax return ( SA900) not your personal tax return, so I very much hope you did not make the error of completing the online CGT reporting on the basis it was your personal disposal. The estate would have suffered a  CGT charge at the 24% rate for 2024/25, any less then you made a mistake.

    In fact going a stage further if the estate has generated untaxed income since date of death (interest, dividends etc) these are also tax reportable on the estate tax return.

    Given your evident lack of familiarity with estate tax compliance and procedure, if you are intent on proceeding without professional help, suggest you study the guidance below  to bring yourself up to speed. Seems you may have a lot to learn.

    https://www.litrg.org.uk/tax-nic/trusts-and-estates/bereavement-tax-issues-death/tax-income-and-gains-after-death




  • doodle483
    doodle483 Posts: 9 Forumite
    First Post
    poseidon1 said:
    doodle483 said:
    I've had a search on here/Google but couldn't find the answer.

    I am executor of my mother's estate, along with my brother. We are also both the main (but not sole) beneficiaries. We sold my mother's house as part of the estate and have paid the relevant CGT as it increased in value between DoD and sale. We used £3k personal allowance to calculate the CGT as the house was still in my mother's name when sold.

    She also has shares to sell, which have increased in value since DoD. I understand that I cannot use the estate £3k personal allowance to sell these until the next tax year. However, if they were transferred into mine/my brother's name and we sold them within this tax year, could either of us use our own £3k personal allowance? They have only increased by approx. £1k.

    I'm struggling to understand whether the £3k 'estate' personal allowance counts as either my brother's or mine, or whether is it separate and we still have our own personal allowance for this tax year? The CGT bill for the house says that I need to declare the charge when I complete my own personal Self-Assessment, which I'm struggling to understand as the charge was for the estate and not my own personal finances. 

    All help appreciated. I'd like to sell the shares this tax year if I can (transferring into mine/my brother's name first) but I can wait until April if needed to avoided paying CGT on the gain.
    The estate has its own CGT exemption in the tax year of death and 2 tax years thereafter.

    Sounds as if the property sale has used the current year's exemption.

    Accordingly, assuming the shareholdings are not needed for the continued administration of the estate, it would be sensible  to transfer all shareholdings out of the estate into  your own personal names and then make use of your own  CGT exemptions to avoid tax going forward.

    Incidentally the gain on the property sale is to be reported on the estate tax return ( SA900) not your personal tax return, so I very much hope you did not make the error of completing the online CGT reporting on the basis it was your personal disposal. The estate would have suffered a  CGT charge at the 24% rate for 2024/25, any less then you made a mistake.

    In fact going a stage further if the estate has generated untaxed income since date of death (interest, dividends etc) these are also tax reportable on the estate tax return.

    Given your evident lack of familiarity with estate tax compliance and procedure, if you are intent on proceeding without professional help, suggest you study the guidance below  to bring yourself up to speed. Seems you may have a lot to learn.

    https://www.litrg.org.uk/tax-nic/trusts-and-estates/bereavement-tax-issues-death/tax-income-and-gains-after-death




    Thank you for your response, even if it could have been worded more kindly.

    Yes, I reported it as an estate tax return (24% CGT), not a personal tax return so the mistake that you suggest was not made. Also, my understanding is that the generated income (dividends) is not tax reportable as it totals less than £500 this tax year. Obviously, I have a lot to learn so if you are correct and I am wrong, please alert me.
  • poseidon1
    poseidon1 Posts: 1,787 Forumite
    1,000 Posts Second Anniversary Name Dropper
    doodle483 said:
    poseidon1 said:
    doodle483 said:
    I've had a search on here/Google but couldn't find the answer.

    I am executor of my mother's estate, along with my brother. We are also both the main (but not sole) beneficiaries. We sold my mother's house as part of the estate and have paid the relevant CGT as it increased in value between DoD and sale. We used £3k personal allowance to calculate the CGT as the house was still in my mother's name when sold.

    She also has shares to sell, which have increased in value since DoD. I understand that I cannot use the estate £3k personal allowance to sell these until the next tax year. However, if they were transferred into mine/my brother's name and we sold them within this tax year, could either of us use our own £3k personal allowance? They have only increased by approx. £1k.

    I'm struggling to understand whether the £3k 'estate' personal allowance counts as either my brother's or mine, or whether is it separate and we still have our own personal allowance for this tax year? The CGT bill for the house says that I need to declare the charge when I complete my own personal Self-Assessment, which I'm struggling to understand as the charge was for the estate and not my own personal finances. 

    All help appreciated. I'd like to sell the shares this tax year if I can (transferring into mine/my brother's name first) but I can wait until April if needed to avoided paying CGT on the gain.
    The estate has its own CGT exemption in the tax year of death and 2 tax years thereafter.

    Sounds as if the property sale has used the current year's exemption.

    Accordingly, assuming the shareholdings are not needed for the continued administration of the estate, it would be sensible  to transfer all shareholdings out of the estate into  your own personal names and then make use of your own  CGT exemptions to avoid tax going forward.

    Incidentally the gain on the property sale is to be reported on the estate tax return ( SA900) not your personal tax return, so I very much hope you did not make the error of completing the online CGT reporting on the basis it was your personal disposal. The estate would have suffered a  CGT charge at the 24% rate for 2024/25, any less then you made a mistake.

    In fact going a stage further if the estate has generated untaxed income since date of death (interest, dividends etc) these are also tax reportable on the estate tax return.

    Given your evident lack of familiarity with estate tax compliance and procedure, if you are intent on proceeding without professional help, suggest you study the guidance below  to bring yourself up to speed. Seems you may have a lot to learn.

    https://www.litrg.org.uk/tax-nic/trusts-and-estates/bereavement-tax-issues-death/tax-income-and-gains-after-death




    Thank you for your response, even if it could have been worded more kindly.
    Yes, I reported it as an estate tax return (24% CGT), not a personal tax return so the mistake that you suggest was not made. Also, my understanding is that the generated income (dividends) is not tax reportable as it totals less than £500 this tax year. Obviously, I have a lot to learn so if you are correct and I am wrong, please alert me.
    Yes absolutely correct on estate income tax if it totals under £500 for the year it's effectively tax free to both the estate and the beneficiaries entitled thereto.

    Presumably you are planning to distribute pproperty sale proceeds quickly to avoid interest accruing from that source?
  • doodle483
    doodle483 Posts: 9 Forumite
    First Post
    poseidon1 said:
    doodle483 said:
    poseidon1 said:
    doodle483 said:
    I've had a search on here/Google but couldn't find the answer.

    I am executor of my mother's estate, along with my brother. We are also both the main (but not sole) beneficiaries. We sold my mother's house as part of the estate and have paid the relevant CGT as it increased in value between DoD and sale. We used £3k personal allowance to calculate the CGT as the house was still in my mother's name when sold.

    She also has shares to sell, which have increased in value since DoD. I understand that I cannot use the estate £3k personal allowance to sell these until the next tax year. However, if they were transferred into mine/my brother's name and we sold them within this tax year, could either of us use our own £3k personal allowance? They have only increased by approx. £1k.

    I'm struggling to understand whether the £3k 'estate' personal allowance counts as either my brother's or mine, or whether is it separate and we still have our own personal allowance for this tax year? The CGT bill for the house says that I need to declare the charge when I complete my own personal Self-Assessment, which I'm struggling to understand as the charge was for the estate and not my own personal finances. 

    All help appreciated. I'd like to sell the shares this tax year if I can (transferring into mine/my brother's name first) but I can wait until April if needed to avoided paying CGT on the gain.
    The estate has its own CGT exemption in the tax year of death and 2 tax years thereafter.

    Sounds as if the property sale has used the current year's exemption.

    Accordingly, assuming the shareholdings are not needed for the continued administration of the estate, it would be sensible  to transfer all shareholdings out of the estate into  your own personal names and then make use of your own  CGT exemptions to avoid tax going forward.

    Incidentally the gain on the property sale is to be reported on the estate tax return ( SA900) not your personal tax return, so I very much hope you did not make the error of completing the online CGT reporting on the basis it was your personal disposal. The estate would have suffered a  CGT charge at the 24% rate for 2024/25, any less then you made a mistake.

    In fact going a stage further if the estate has generated untaxed income since date of death (interest, dividends etc) these are also tax reportable on the estate tax return.

    Given your evident lack of familiarity with estate tax compliance and procedure, if you are intent on proceeding without professional help, suggest you study the guidance below  to bring yourself up to speed. Seems you may have a lot to learn.

    https://www.litrg.org.uk/tax-nic/trusts-and-estates/bereavement-tax-issues-death/tax-income-and-gains-after-death




    Thank you for your response, even if it could have been worded more kindly.
    Yes, I reported it as an estate tax return (24% CGT), not a personal tax return so the mistake that you suggest was not made. Also, my understanding is that the generated income (dividends) is not tax reportable as it totals less than £500 this tax year. Obviously, I have a lot to learn so if you are correct and I am wrong, please alert me.
    Yes absolutely correct on estate income tax if it totals under £500 for the year it's effectively tax free to both the estate and the beneficiaries entitled thereto.

    Presumably you are planning to distribute pproperty sale proceeds quickly to avoid interest accruing from that source?
    Already done! Other than the shares, everything was distributed as soon as it came in (after bills paid).
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