CGT / IHT

Back to basics....

Didn't find your answer?

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)

Please login or register to join the discussion.

avatar
By David Heaton
25th Sep 2019 14:00

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.

Thanks (1)
avatar
By Justin Bryant
25th Sep 2019 14:15

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.

Thanks (1)
RLI
By lionofludesch
25th Sep 2019 14:39

Top tip for CGT avoidance - just die.

Thanks (1)
Replying to lionofludesch:
avatar
By The Dullard
25th Sep 2019 16:46

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.

Thanks (1)
Replying to The Dullard:
avatar
By Tax Dragon
25th Sep 2019 16:53

Liabilities: you can't take them with you.

Thanks (0)
Replying to The Dullard:
RLI
By lionofludesch
25th Sep 2019 17:02

The Dullard wrote:

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 ?

Thanks (0)
avatar
By fawltybasil2575
25th Sep 2019 16:12

@ 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.

Thanks (2)
Replying to fawltybasil2575:
RLI
By lionofludesch
25th Sep 2019 16:59

Nothing's forever, Basil

Thanks (0)
Replying to lionofludesch:
avatar
By Tax Dragon
25th Sep 2019 17:04

I'm confident it will still be Skinner and Baddiel when it comes to releasing "Sixty years of hurt"...

Thanks (0)