Meg Saksida looks at some capital gains tax points for personal representatives and their advisers to keep in mind.
The estates of deceased individuals do not have to pay both capital gains tax (CGT) and inheritance tax (IHT) on their chargeable assets on the individual’s death. There is what is commonly termed a ‘CGT-free uplift’ at death, such that assets in the deceased’s estate are simply rebased to market (or probate) value at the date of the death.
If the individual had been alive, the gift may have been subject to a deferred CGT liability, having been transferred to the deceased with holdover relief (under TCGA 1992, ss 165 or 260); such gains are also extinguished on the death of the individual.
CGT and IHT rates
It will clearly be a benefit for taxpayers not to have to pay both CGT and IHT on their assets at death.
