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CGT ACQUISITION DATE

CGT ACQUISTION DATE

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I have clients who were beneficiaries in their grandmothers will she died in 1998.  In the will although the grandchildren were bequethed the property their

uncle retained a life interest.  Said uncle has now died and some of the property is to be sold.  Will the base cost for CGT purposes be the probate valuation in 1998 or

the current market value at the date of the uncle's death

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By Hugo Fair
03rd Jul 2022 11:56

On what basis do you think that "the base cost for CGT purposes (might) be the probate valuation in 1998"?
Who owned the asset(s) from 1998 onwards (as opposed to merely had an interest)?
Is the proposed sale being offered by the grandchildren, or by the uncle's estate?

Given that you 'own a number of properties', do you not have someone with the relevant expertise from whom to get a professional opinion?

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By David Ex
03rd Jul 2022 12:17

Reading your previous question, it appears you aren’t an accountant so I would be wary of offering tax advice to your clients.

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By Paul Crowley
03rd Jul 2022 14:28

If you say 'I have clients' we tend to assume that you are an accountant, tax advisor, or a bookkeeper.
Ownersip is a matter of fact.
Your clients need to find out whether they own the property, and when that ownership started.
Therefore the original will (grandma's) is probably the start point.
This MUST have been explained at the time.

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By CJaneH
04th Jul 2022 10:47

Reading between the lines it is probable that the following is the situation
A will trust was set up on death of grandmother, her son life tenant. His nephews & nieces to inherit on his death.
As no income or expenses there will probably been no trust accounts, no returns to HMRC.

The question he should be asking is does the trust fall in to the uncles estate for probate?

As some one who has avoided trusts I would be grateful could some one answer that question for me.

I agree the OP needs to talk to the solicitor(s) and probably to an accountant experienced in trusts.

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Replying to CJaneH:
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By AB_85
04th Jul 2022 13:28

"As some one who has avoided trusts I would be grateful could some one answer that question for me."

If the circumstances are as described then (assuming the uncle's life interest continues undisturbed until his death), I think it would fall into his estate for IHT purposes as a qualifying interest in possession trust. The trustees would need to file an IHT 100 and provide a copy to the executors of the estate so they can fill out the section of the IHT400 that deals with interests in trusts.

"Fall in to the uncles estate for probate" is slightly different as the property would pass outside the uncle's will, according to the terms sent out in the grandparent's will trust. So it would fall to the trustees, not the executors, to ensure that the property passes to the kids.

Only the OP knows (hopefully) if the circumstances are as you describe, but I agree it's the most probable explanation.

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Replying to AB_85:
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By CJaneH
05th Jul 2022 11:44

Thanks AB 85.

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