Income Arising on Death

Question 1

How income/savings and dividends following a Testator’s death are treated?

Answer 1

The rates of tax are:
* Savings income: 20%
* Dividends: 7.5% on dividends received up until 5 April 2022, 8.75% on dividends received
from 6 April 2022.
* No higher tax rates are applied, no matter how much income is received.
* Executor will have to pay for relevant taxes.

Question 2

What is the CGT payable?

Answer 2

PRs pay a standard CGT rate of 20% on disposals (except residential property, which is 24%).

PRs are deemed to acquire assets at the market value at the date of death (this is called the “probate value”).

No CGT is payable on death, only when PRs sell an asset at a gain after the date of death.