Husband dies and leaves everything to wife. Therefore, no IHT ?
During his lifetime, he had accumulated a share portfolio worth approx £2 million at date or death.
Ordinarily, there would have been significant gains on those shares.
Am I correct that there is no CGT on death, and wife takes over the shares at a new base costs equivalent to probate value ? Therefore, she can sell entire portfolio with little / no CGT ? (gain only on value from date of death up until sale).
Thanks for replies....
Replies (9)
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Let's assume he is UK-domiciled. There's no IHT provided she's also UK-domiciled (in fact or deemed so). The share values are indeed uplifted to market value at date of death for the purposes of CGT.
David is of course 100% correct and indeed if he didn't own the shares and wife did then the GAAR (as DH knows being a highly respected former GAAR panel member) allows a ng/nl transfer pre-death (which could be on deathbed) and CGT MV uplift to wash out the gain.
That also works for:
- inheritance tax,
- income tax,
- national insurance,
- stamp duty,
- stamp duty land tax,
- land transactions tax,
- land and buildings transactions tax,
- value added tax,
- vehicle excise duty,
- fuel duty,
- betting and gaming duty,
- alcohol and liquor duty,
- customs duties,
- air passenger duty, and
- council tax.
You don't have to pay any of them when you're dead.
That also works for:
- inheritance tax,
- income tax,
- national insurance,
- stamp duty,
- stamp duty land tax,
- land transactions tax,
- land and buildings transactions tax,
- value added tax,
- vehicle excise duty,
- fuel duty,
- betting and gaming duty,
- alcohol and liquor duty,
- customs duties,
- air passenger duty, and
- council tax.You don't have to pay any of them when you're dead.
Wig Powder Tax ?
@ John Hughes (OP).
Eminent members above have highlighted the (in some ways) anomaly to which you refer.
Please note however that this situation may not continue indefinitely. The Office of Tax Simplification (OTS) states that this situation, among others, requires careful consideration. Here is a useful link to an FT article, which contains details of several aspects of IHT requiring review:-
https://www.ft.com/content/10370c58-a235-11e9-974c-ad1c6ab5efd1
[Scroll down to the "Remove the capital gains uplift" paragraph, for detailed comment on the situation per your question].
Those persons affected by this situation, and their advisors, should IMHO give especial consideration to this matter, particularly where the current value of assets includes a substantial unrealised CGT gain element, in anticipation of a possible change in legislation: guidance on action required to limit clients' exposure to such change in legislation may be hugely beneficial.
I can see the importance of this matter (and I personally am certainly NOT an IHT specialist).
Basil.
I'm confident it will still be Skinner and Baddiel when it comes to releasing "Sixty years of hurt"...