Malcolm Finney examines the implications of the CGT uplift on an individual’s death.
Capital gains tax (CGT) is levied on gains of a capital nature made on disposals (be that sales or gifts). On any disposal there is typically a corresponding acquisition.
However, on death the personal representatives (PRs), typically executors, are deemed to have acquired those assets comprised in the deceased’s estate, albeit there is no corresponding disposals by the deceased. The result is that the assets are revalued at the date of death to market values with no consequent CGT charge as no disposals occur.
If at the date of death the values of the assets are ‘ascertained’ for inheritance tax (IHT) purposes, those ascertained values become the base costs for CGT purposes for the PRs.
