IHT for Income and CGT

Question 1

What must PR do in relation to income and CGT?

Answer 1

1. Compete Return
   - for income tax between 6th April and Death
2. Settle Tax Owed
   - must be finalised before IHT (otherwise cannot calculate)

Question 2

What income tax must PR pay?

Answer 2

1. unpaid income tax before death
2. Income arising from assets held during administration

Question 3

What CGT must PR pay?

Answer 3

CGT on assets they sell during administration

Question 4

What formalities are there for filing and paying Income and CGT?

Answer 4

Return to be filed by 31 Jan
- Make informal and single income and CGT computation

Question 5

How is income and CGT taxed for PRs?

Answer 5

Savings and Non-Saving
- basic rate (20%)

Dividends
- ordinary rate 7.5%

CGT
- take property at market value on date of death
- receive annual exempt amount for year or death and next 2 years only (£12,300)
- paid at 20% (28% residential property)