INHERITANCE TAX VERSUS CAPITAL GAINS TAX

Maisiesdad

SIX YEARS AGO MOTHER DIED, FATHER DIED PREVIOUSLY TO HER AND THEIR JOINT I.T. ALLOWANCE IS £625K. THE ASSETS CAME TO MUCH LESS THAN THIS SO NO INHERITANCE TAX TO PAY. BECAUSE OF OBSTRUCTIONS FROM THE OTHER EXECUTOR THE SHARES HAVE ONLY JUST BEEN SOLD BUT PROCEEDS STILL COME TO BELOW THE ALLOWANCE. DO THE SHARE PROCEEDS COME UNDER THE I.T. OR UNDER CAPITAL GAINS TAX?

poseidon1

The joint IHT exemption is £650k not £625k.

If they also had a house the joint exemption increases up to £1 million.

As for the value of shareholdings, if they were not liable to IHT at date of death, there is no IHT exposure on later sale at a higher price.

However, the profit between death and eventual sale may be liable to CGT at 24%, subject to an estate £3,000 annual CGT exemption if the sale is within 3 tax years of death. See article below -

https://withfarra.co.uk/guides/capital-gains-tax-selling-estate-assets-uk

Any profit sales beyond that time limit are fully taxable with no estate CGT exemption then available.

TadleyBaggie

For anyone who is having issues reading the OP, here it is correctly cased

Six years ago mother died, father died previously to her and their joint i.t. allowance is £625k. The assets came to much less than this so no inheritance tax to pay. Because of obstructions from the other executor the shares have only just been sold but proceeds still come to below the allowance. Do the share proceeds come under the i.t. or under capital gains tax?