Inheritance Tax

[branca]

Shares - the value is calculated at death, before selling, for IT purposes. I thought that I had read that when the estate is settled, say after 6 months, if the value of the shares has gone up, you do not have to pay any additional tax.

Is that right?

[dzug2]

You are correct.

But if the shares are transferred to a beneficiary then he may be liable for CGT when he sells them based on the value at death

[magsmay]

The value of the shares are calculated on the day of the death of the owner (or there-a bouts) as is any other Capital Assets they have. If they have a house as part of their Estate then it is valued as soon as possible after death -if the house goes up or down in price between the valuation and sale, it is not taken into account -shares are the same.

[dzug2]

and the estate could be liable for CGT rather than IHT

So you lose both ways

[Peter Pedant]

Having inherited shares from my lady mother
I have kept the values at probate (1994 actually but so what)
( to which they are rebased to use a technical term)

and when I sell them which I do periodically I expect to pay CGT on the difference of the probate price and the selling price (NOT the price at which she bought them)
taking into account of course the year tax free wodge of ten k.


Usual straighforward rules , you can sell other shares during that year to crystallise a loss - but you cant transfer the loss against income or rent or a trading loss or anything.

If the gain is over ten k (not the selling value but the difference between proabte value and selling price) then sell in two different years - Hey we are coming up to Apr 4th so it would be really easy to do that now!

[branca]

Thanks all - so if the share value goes up, I will not be liable for further IT, but maybe liable for capital gains, of which I have an allowance of approx £10k/annum.

Ta

[buildersmate]

Yes you do, and the estate of the deceased ALSO gets a CGT annual allowance, in the event that the shares or other assests held in the estate have appreciated in value since the date of death (which is the date used for probate valuation, on which IHT is liability is assessed).