HMRC -how to apply CG30570 to probate estate

Probate - how I can apply CG30570 - cost of establishing title on shares sold

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Dear Friends,

I wonder if I may pose you a question as have exhausted all other resources.

I am executor of an estate (which consists of 3 parts of property, money and shares). As IHT needs to be paid, the house and shares have been sold. As shares had decreased in value, I will be claiming on form IHT35 (for the loss - relief which equates to amount IHT was paid on the loss).

I believe shares were valued gross for IHT and gross for the IHT35 form, does anyone know how I can apply CG30570 - cost of establishing title (an approved % of estate value), on the shares (CG30570 should be able to be applied to establishing title to the money also?  )

thanks 

David Bugs

 many thanks for any input.

 

Replies (3)

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By Hugo Fair
27th Nov 2022 18:03

It's not very clear (to me anyway) exactly what you're asking.

If you type 'cg30570' into Google, the first entry is https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg30570 - which sets out the amounts allowed as the personal representatives’ allowable expenditure for the cost of establishing title. Is that what you wanted?

Note: these are "admissible deductions" (not fixed amounts), so act as a cap on your claim - which should consist of actual costs incurred.

There is no restriction as to the types of assets for which title needed to be established ... but, whereas fees for doing this for shares are common (and not large), it is relatively unusual in the case of bank accounts - or are you talking about some more convoluted form of cash holdings?

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By More unearned luck
27th Nov 2022 20:37

I assume that the shares in question are quoted.

The decision in CIR v Richards' Executors 46TC626 concerned capital gains tax, it held that the cost of obtaining probate was an allowable cost for that tax . SP2/04 which is reproduced in CG30570 without, oddly, saying it's SP2/04 sets out a convenient way of establishing that cost. It is probably overdue an overhaul re inflation. It only applies if the vendors are the executors or administrators.

The decision and the table are irrelevant to IHT. Form IHT35 (and the law) require you to compare the gross proceeds of all the shares sold (not just those sold at a loss) with their probate values (which will be either a quarter up on the closing prices or half up on the highest and lowest bargain of the day).

Your error is to assume that a word (ie 'loss') used in one Act of Parliament has the same meaning as the same word used in a different Act or, at least, is computed in the same way.

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By More unearned luck
27th Nov 2022 20:37

repeat.

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