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Where Taxpayers and Advisers Meet

GCT on inherited assets - valuation dates

Posts: 16
Joined: Mon Feb 23, 2015 4:00 pm

GCT on inherited assets - valuation dates

Postby davidxt » Mon Apr 29, 2019 9:33 am

My mother died in January leaving her estate to my father. Her assets included some shares which after grant of probate have been transferred to my father's ownership. After registration in his name he has gifted them to me as a PET. I am trying to understand the IHT/CGT implications.

There was no CGT within the estate on the gain made by the shares since purchase by my mother because shares are revalued at death. There was no IHT on my mother's estate because of spousal exemption. But there was a capital gain on the assets between the date of probate valuation and the eventual date of transfer to my father, and another small one between the date of his acquisition and the date of the gifted transfer to me.

My understanding at present is that:
1. the gain made between probate valuation and transfer to the surviving spouse is accounted for as an IHT adjustment and that since it is a spousal inheritance and IHT exemption continues to apply, I (as executor) do not need to inform HMRC either on IHT or CGT grounds.
2. The gain made within my father's assets when subsequently gifting the shares to me counts against his annual CGT allowance, the gain being calculated as the difference between their value on the date of registration into his name and the date of the registration into my name.

I'd be most grateful for any comments on my assumptions.

Posts: 4495
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: GCT on inherited assets - valuation dates

Postby pawncob » Mon Apr 29, 2019 11:43 am

Your father takes assets at probate value regardless of date of transfer.
The gain is from probate value to value at date of transfer to you. He can use his annual exemption against this. If there's tax payable, consider varying the will and transfer direct to you.
With a pinch of salt take what I say, but don't exceed your RDA

Posts: 16
Joined: Mon Feb 23, 2015 4:00 pm

Re: GCT on inherited assets - valuation dates

Postby davidxt » Tue May 07, 2019 9:08 am

[OP}: My appreciation, thank you for the response.

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