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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am executor, and inheritor of my mother's estate, that is

Resolved Question:

I am executor, and inheritor of my mother's estate, that is currently going through probate and is in the NIL IHT band. Part of the estate is shares. Two queries :
1. If the shares show a capital gain above the annual exemption limit between the probate value and their value when ownership passes to me is CGT declarable/payable when the shares pass to my ownership or only when I eventually dispose of them to a third party ?
2. Do I as executor have to include dividends in my personal tax return that accrue to the shares between date of death and when ownership passes to me ?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Hello and welcome to the site. Thank you for your question.

You would only declare capital gain when it is realised by you, i.e. when you sell those shares in due course. It is at that point you would work out chargeable gain based on probate value and pay CGT if any.

If the estate is in receipt of income in the form of dividends on shares held at the time of death, thereis no further tax due on that income as tax would have been deducted at source (albeit in the case of dividends notional tax).

More information on this can be found here

https://www.moneyadviceservice.org.uk/en/articles/calculating-and-paying-tax-after-someone-dies


I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 1 year ago.

However if I as executor am liable to the higher rate of tax then do I have to declare the dividends received between date of death and when the shares pass to me and pay the extra tax.

Expert:  taxadvisor.uk replied 1 year ago.
Peter, thank you for reply.

You would only inherit the shares once they have been passed to you. Until such time, they form part of the estate and therefore you would not declare those dividends in your tax return.

I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4786
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.

Best wishes.

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