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What is the date of acquisition?

When assets are acquired from a deceased person's estate, on what date do they get them?

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An individual dies on 5 March 2020 holding some shares in a trading company worth £100k.  It takes the lawyers six months to get the estate in order, and to settle the bequests in the Will.  The shares are to go to the son of the deceased as per the Will, and are so transferred on 5 September 2020.

I'm assuming that most would agree that the value/base cost attributable to the shares transferred to the son would be £100k, this being the probate value (or value at the date of death), regardless of whether in those intervening six months there had been any movement in their value.

But, when did the son take ownership of the shares?  I've not had to consider this scenario before, but would've expected it would be March 2020, so that the acquisition date was in line with the value placed on the asset at that time, but how does this stack up against how the estate is taxed on income arising in the admin period, prior to the son acquiring the shares?!  It seems wrong to take the March value with the September date? 

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By Tax Dragon
16th Jan 2020 14:06

Different rules for different taxes.

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By Tax Dragon
16th Jan 2020 14:14

More specifically, you'll notice that the March rule stacks up very well with the Executors not being taxed on the gain (if there is a gain) on the September transfer.

(But obviously he doesn't really own them till September. So, e.g., no ER for two years from then. Probably anyway... hey I'm waffling here, alright? Not researching.)

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By The Dullard
16th Jan 2020 14:22

CGT looks at beneficial ownership, so, specific bequeath = date of death. I don't agree on the above ER point. Ownership begins on acquisition (except for PPRs bought off plan), although the other qualifying criteria (like being an officer or employee) might not be satisfied until such time as they actually are.

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Replying to The Dullard:
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By Tax Dragon
16th Jan 2020 14:32

The Dullard wrote:

CGT looks at beneficial ownership, so, specific bequeath = date of death.

So s62(4) is otiose?

On ER, it's the votes what does for it, probably. You don't get those till you actually get the shares.

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By ianthetaxman
16th Jan 2020 14:43

Having done more digging, I have found this in Tolley (Simon's Taxes) under a CGT heading which mirrors s.62 (4):

C1.206A Personal representatives: transfer of assets to a legatee
On the disposal of assets by the personal representatives to a legatee, in most cases:

(a) no chargeable gain accrues to the personal representatives; and

(b) the legatee is treated as if the personal representatives' acquisition of the asset had been his acquisition of it1
Therefore, the legatee's date of acquisition is the date of death and the acquisition value is the market value at the date of death.

This suggests that we use date of death for value/base cost and date of ownership.

My two main concerns are ER and BPR, so want to be happy with the date ownership began for each of these.

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Replying to ianthetaxman:
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By Tax Dragon
16th Jan 2020 14:57

So one of my guesses was good.

I hadn't picked up the point that Dulls has - that you seem to be talking about a specific legacy. In those circs, I believe the Executors are effectively bare trustees. The beneficial ownership point is well made. (And the income is taxable on him, not the Executors... your assumption there is what made me miss the legacy point.)

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