Capital Gains Tax following probate
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Alice_Holt
Posts: 5,959 Forumite
in Cutting tax
A friend has asked me this question.
She has inherited investments from her mother.
Probate and the succeeding process took some time to complete, consequently the investments only came available to her recently.
She has sold those investments - they have increased in value by c.£18k since probate.
What is her liability for CGT?
Her income is less than the personal allowance.
Her solicitor does not think there is CGT, as she wasn't able to access it during that period of capital gain. And that she doesn't need to advise HMRC.
I not sure this is correct. I suspect she may have a CG of £18 less the CGT allowance, i.e £6.7k @ 10%. So a CGT liability of c.£670.
My suggestion was to notify HMRC of the circumstances and ask them for guidance.
What do other forumites think?
Many Thanks.
She has inherited investments from her mother.
Probate and the succeeding process took some time to complete, consequently the investments only came available to her recently.
She has sold those investments - they have increased in value by c.£18k since probate.
What is her liability for CGT?
Her income is less than the personal allowance.
Her solicitor does not think there is CGT, as she wasn't able to access it during that period of capital gain. And that she doesn't need to advise HMRC.
I not sure this is correct. I suspect she may have a CG of £18 less the CGT allowance, i.e £6.7k @ 10%. So a CGT liability of c.£670.
My suggestion was to notify HMRC of the circumstances and ask them for guidance.
What do other forumites think?
Many Thanks.
Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.
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Comments
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what does "came available to her" mean?
It appears the investments have been sold by her AFTER the estate has been distributed to her as the beneficiary?
no idea why the solicitor thinks that does not mean a CGT liability based on the probate value, as you yourself have identified. Just because the solicitor did not sell as executor does not mean the shares are somehow revalued when the executor then distributes to the beneficiaries and they then sell them.0 -
[FONT=Verdana, sans-serif]There will be a capital gain and tax will be payable on £18,000-£11,300-allowable expenses.[/FONT]
[FONT=Verdana, sans-serif]If the estate sold the shares tax will be at 18% but if the shares were transferred by the estate to your friend then she will be taxed at 10%.[/FONT]
[FONT=Verdana, sans-serif]She takes on the shares at probate value but can offset any costs which were incurred in transferring the shares to her plus any disposal costs.[/FONT]0 -
Her solicitor does not think there is CGT, as she wasn't able to access it during that period of capital gain. And that she doesn't need to advise HMRC.
Ask her solicitor to indemnify her against any loss incurred by taking his advice!I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Thanks all,
On the face of it. it did seem strange advice to me.
Just wondered if there was anything about the workings of probate and inheritance I wasn't aware of.Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.0
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