Malcolm Finney highlights the potential interaction between inheritance tax and capital gains tax.
Typically, with respect to a particular transaction a person is liable to either inheritance tax (IHT) or capital gains tax (CGT) but there are also transactions giving rise to charges to both taxes.
At least in theory, a person may be in a position to choose which of the two taxes produces the lower charge.
Death and taxes
On death, an IHT charge (at 40%) arises on the market value of the assets of the deceased comprised in their estate (less any liabilities of the estate, e.g., loans which remain outstanding at the time of the deceased’s death). Other things being equal, the less the deceased owns at death, the lower any charge to IHT will be.
However, from a CGT perspective, the more the deceased owns on death, the less any
