How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Joshua Your Own Question
Joshua
Joshua, Lawyer
Category: Family Law
Satisfied Customers: 26069
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
35043042
Type Your Family Law Question Here...
Joshua is online now

Our Mother died in 1988 & left shares in a trust fund

Resolved Question:

Our Mother died in 1988 & left shares in a trust fund for my siblings & I. The trust fund ended when our Father died in 2010, he had until then received all the income from the shares. Recently the shares have been sold. We have each received our tax free allowance. Our queries regard the rest of the share money.
Do we have to pay capital gains tax back to the date of our Mother's death in 1988 or to our Fathers Death in 2010?
Do we need to fill in a self assessment tax form or is there a tax form for just capital gains tax?
Where would be the best place for us to go to find out the value of the shares for either 1988 or 2010, depending on your answer?
Submitted: 2 years ago.
Category: Family Law
Expert:  Joshua replied 2 years ago.
Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I confirm I understand the position correctly: from what you say do I understand that under the trust your father had a right to the income from the shares but that the share capital itself fell to you and your siblings following your fathers death. The specific point I seek to clarify is that your father had a right to the income under the trust rather than it being a discretionary decision to give him the income on the part of the trustees. Are you able to indly confirm?

Customer:

Yes our father had a right to the income until his death. This was stated in our Mothers will.

Joshua :

Many thanks. Finally do you know the approximate value of the shares in question? Were there any other significant assets in the trust apart from the shares?

Customer:

The share value was approximately £120,000. The family home was also left for Dad to live in until his death. We have not started to sell the property as my 2 sisters still live there.

Customer:

I have to go our shortly to the Doctors. But will be back to you in due course. Thanks for your help so far.

Joshua :

Thanks for the above information. There are two taxes for the executors to concern themselves with. The first is income tax due on the income from the sahre s during your fathers life. Under a life interest trust income tax where your father had a right to the income from the shares during his life your income tax is payable by your father at his own tax rate. The executors will need to ensure that his income tax liabilities are finalised by completing a self assessment form (if your father completed self assessment tax forms) or if income was deducted at source, then an R27 form to finalise the income tax position up to the date of his death. This may already have been done.

Joshua :

The second tax is that which you identify - capital gains tax. The shares to which your father had a right to income are treated for the purposes of inheritance tax as being absolutely his property and valued as such within his estate. In other words, the approximate show value £120,000 should have been included as an asset in his estate in his probate return and inheritance tax assessed thereon. For the purposes now of capital gains tax, an uplift in base value for the shares is allowed under the Capital Gains Tax Act to the value declared in your father's probate return.

This means that when you come to sell the shares, capital gains tax will be assessed on each of you on the difference between the value of the shares as at the date of your fathers death and the date the shares are sold. Obviously each of you can deduct any unused annual allowance from any gain to calculate whether any capital gains tax is due

Joshua :

You can either ask the stockbroker to professionally value the shares or you can use an online service to value the same such as the following:

Joshua :

https://uk.finance.yahoo.com/q/hp?s=GOOG

Joshua :

To use the service, you simply enter the quoted company you are searching for and one selected click on the historical share price link on the left-hand side. Obviously the service only works for quoted shares which I assume these are. In the event the unquoted shares, you would need to contact a chartered accountant for valuations

Joshua :

Does the above answer all your questions or is there anything I can clarify or help you with any further?

Customer:

Joshua, Just to clarify, we each need to fill in a self assessment tax form?

Joshua :

Sorry for the delay in reverting to you.

Joshua :

With regards ***** ***** each of you will need to complete a return but only if you calculate that there is any CGT due having deducted your annual allowances in each case. There is no need to submit a CGT return if there is no CGT to pay

Joshua :

Have I been able to help you with all your questions on the above or I can I help with anything else?

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though

Customer:

Joshua, Just one more question and I hope it is the last. What is the difference between quoted shares and unquoted shares?

Joshua :

No problem at all - I am sorry we keep missing each other this evening. Quoted shares are shares that are listed on a stock market - the best know in the UK being FTSE but of course there are hundreds of such exchanges around the world. Unquoted companies are those that are not listed on a stock market - e.g. shares in a private limited company. The link I have given you can only value quoted shares on major stock markets which I assume is what you are dealing with but in they event they are unquoted shares - e.g. shares in a family company or something of like, you would need to seek a valuation from a valuer.

Joshua :

Is there anything I can clarify for you above or does that answer all your questions for now?

Customer:

Thanks that is everything for now.

Joshua and other Family Law Specialists are ready to help you