Mills & Co Chartered Accountants
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Acquisition cost for inherited item from a spouse?

Basically the current position is a husband and wife are in a 50:50 partnership.

The husband has found out he has weeks to live.  Due to this the business will eventually be sold.

The advice the client's are receiving from elsewhere is 

1.  For the wife to gift her share to her husband (so no CGT as husband and wife transfer so no gain/no loss).

2.  The husband will then leave the 100% of the business to the wife in his will (So no IHT on leaving to his wife).

3.  The wife will now have acquired at the current market value from her husband therefore there will be no CGT payable, when it is sold.

I would have assumed that in the circumstances there would have been a provision that the wife would just be treated as having acquired the business back at their initial costs, so effectively she would just get the whole gain in her hands.

Everything I read though, suggests that the CGT could be avoided by using the above advice. If it was this simple though, I would have thought it would have been a very widespread "trick".

Any help would be much appreciated. 


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20th Mar 2012 10:31


sounds about right to me. the reason you don;t see/hear of it is people don't like to broach death bed tax planning.

Thanks (1)
20th Mar 2012 10:54



Thanks for reply, it's one of those where I have checked the rules trying to make sure there is no provision that has been missed or something.

One item that I have now considered is if there is an offer made before the husband dies, then that could cause problems in that sense.

Thanks (0)
By MJShone
20th Mar 2012 11:15

It is widespread and it does work

However, it does have to be raised in plenty of time. As Chris Wise says, it can be a bit tricky raising the issue of death bed planning when someone is literally on their death bed.

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By blok
20th Mar 2012 11:16


if there is a binding offer for sale prior to death then BPR would be lost.   I think that is what you were getting at.

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