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Where Taxpayers and Advisers Meet

Capital Gains Tax

tax999
Posts:17
Joined:Mon Nov 25, 2019 12:43 pm
Capital Gains Tax

Postby tax999 » Thu Nov 18, 2021 3:42 pm

I wonder if anyone can help.

Recently sold a property for a deceased relative with a gain of around £142,000 so of course CGT payable.

One of the beneficaries was a charity and they are questioning that they shouldnt have paid CGT. Is this true/can I claim CGT back from HMRC?

maths
Posts:8333
Joined:Wed Aug 06, 2008 3:25 pm

Re: Capital Gains Tax

Postby maths » Thu Nov 18, 2021 8:21 pm

Following death, estate assets may be sold by the executors as part of the administration of the estate or by the beneficiaries of any assets inherited.

Where a charity is a beneficiary of an asset of the deceased's estate normally the executors would appoint the asset out to the charity who could then sell the asset CGT free.

What was the nature of the charity's inheritance?

tax999
Posts:17
Joined:Mon Nov 25, 2019 12:43 pm

Re: Capital Gains Tax

Postby tax999 » Fri Nov 19, 2021 2:55 pm

The charity were to received a one third share of the residue. The sale proceeds of the house were in the residue.

Thank you

iwmtaxadvisor
Posts:34
Joined:Wed Sep 09, 2020 5:12 pm
Contact:

Re: Capital Gains Tax

Postby iwmtaxadvisor » Fri Nov 19, 2021 3:38 pm

[quote]..CGT back from HMRC?[/quote]
[b]A:[/b] as you write the question, no. Too late to consider a Deed of Variation, even if it would have helped.

[b]Other aspects[/b] (i) I'm guessing you've claimed expenses in getting title (ii) and used the CGT annual exemption (iii) and not applied the full rate of IHT but the reduced rate.
Robert Noble-Warren, Chartered Tax Adviser and Asset Manager
High net worth families with a UK connection are welcome to book a 40 minute consultation

tax999
Posts:17
Joined:Mon Nov 25, 2019 12:43 pm

Re: Capital Gains Tax

Postby tax999 » Mon Nov 22, 2021 11:56 am

Yes expenses were deducted and full CGT allowance used. There was no IHT payable on the estate so this is not an issue.

pawncob
Posts:4830
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Capital Gains Tax

Postby pawncob » Mon Nov 22, 2021 8:13 pm

The charity didn't pay any CGT. The estate did.
With a pinch of salt take what I say, but don't exceed your RDA

maths
Posts:8333
Joined:Wed Aug 06, 2008 3:25 pm

Re: Capital Gains Tax

Postby maths » Mon Nov 22, 2021 10:03 pm

It seems the executors sold the assets in the residuary estate and they (not the residuary beneficiaries) were liable to CGT on any gains on assets sold.

Preferably, the charity's inheritance should have been conveyed to them (ie the assets) by the executors leaving the charity to sell if appropriate or necessary.

tax999
Posts:17
Joined:Mon Nov 25, 2019 12:43 pm

Re: Capital Gains Tax

Postby tax999 » Fri Nov 26, 2021 10:07 am

Yes i think you are right. The property should have been conveyed or sold as bare trustees i believe. Can the charity try to reclaim the tax back?


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