3.3 Taxation - Capital Gains Tax

Question 1

When must PRs pay CGT?

Answer 1

Sale of assets during admin
- Gains made

=> Self-assessment/Tax returns => HMRC/PAYE

Question 2

When must Bens pay CGT?

Answer 2

NOT inheritance

Sale of asset
- Gains

Question 3

What exemptions may apply to CGT?

Answer 3

Annual exemption

- Property sold was used as ‘primary’ residence immediately before death

Question 4

What is the value of assets derived by PRs from Deceased? What if their value increases? What if there are unrelieved losses at death?

Answer 4

Assets > Market value at Deceased’s death

Increase in value (from date of acquiring asset to date of death) => Escape tax net

Losses (NOT relieved) at death => Carry back + Set vs gains (last 3 years)

Question 5

When is a disclaimer free from CGT?

Answer 5

1) Writing (within 2 years of Ben’s death)
2) NO consideration

=> NO CGT
- Treated as if T left gift to entitled person

Question 6

When is a variation free from CGT?

Answer 6

1) Writing (within 2 years of Ben’s death)
2) NO consideration

=> NO CGT
- Treated as if T left gift to entitled person