CGT on personal representatives

[sharpener]

My mother died last December leaving 53k in listed shares and 293k in an AIM portfolio (of which 193k were held for > 2yrs and so qualify for business property relief). My sister and I are the sole legatees. I wanted to keep most of the AIM portfolio for my own tax planning but not the listed shares. She lives in Italy and did not want any of the shares at all.

So I sold the listed shares and 8k of the AIM shares as executor in May, resulting in a gain of ~6k during the administration. The AIM pfo was then transferred into my name and I paid my sister the cash difference to equalise the inheritances and buy out her interest at the May valuation. There was no formal agreement beyond email correspondence between us.

Question 1: Can someone please confirm that the correct CGT treatment is that (i) liability for the 6k gain on the sales falls on me as personal representative and so is within the 10100 annual exemption (ii) half the continuing AIM shares come to me as legatee at their market value at the date of death in December (iii) the other half come to me by virtue of my buying out my sister's interest at the May valuation.

Question 2: As a result of lifetime gifts the NRB is all used up and I eventually got HMRC to agree to payment of the IHT on the 193k by instalments. They told me informally last week that interest is likely to be payable on IHT thus deferred w.e.f. 1 October this year. Has this been announced officially yet?

TIA

[maths]

A common problem re disposals of a deceased's assets following death is the capacity of the person effecting the sale ie was the PR acting qua PR or as bare trustee for a legatee.

Assuming the share sales were effected by you qua exector then, as you indicate, any capital gain is taxable on the executor subject to the annual CGT exemption.

You then suggest that the remaining AIM shares were assented to you as your sister did not wish to inherit the shares, per se. Assuming that there was an assent of the AIM shares then, as you indicate, you would acquire 50% of the shares at their value at death and 50% at their value on the day of assent.

Your sister nevertheless acquired her 50% entitlement and then sold them to you; she will thus have made a capital gain based on the difference between probate value and market value in May. However, as a non-UK resident no UK CGT liability arises on her disposal to you.

The interest rate charged on late IHT payments will be determined under the new rules (FA 2009 and SI 2009 No 2032) and the actual rate will only be known following the BoE Monetary Policy Committe Meeting this month; likely to be 3%.

HMRC's announcement was made in a Press Release of 29th July.

[sharpener]

Thanks maths for yr quick reply.

Hopefully I am fireproof because the letters to the two investment managers specifically say I am writing as executor. The unrealised gains over the period of administration were about 34k so making half of that attributable to my non-resident sister is well worth having.

I understood the outstanding IHT payable by instalments currently qualifies for interest relief as it relate to AIM shares. Is it correct that this is being withdrawn, as I have not been able to find anything very specific on the HMRC web site (even in the 32 page Explanatory Memorandum to SI 2032), only the changes you indicate to the method of calculation of the interest rates?

I was planning to use the deferred IHT to pay for a loft conversion(!) but clearly if I have to pay interest at 3% then I might as well pay off the entire amount as after tax it will not earn that in the bank.

TIA