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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I have a client whose husband bought shares in his own

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Hi
I have a client whose husband bought shares in his own name and then the shares were transferred to his wife upon his death. She has recently sold the shares and will be providing money to her children from the proceeds of the sale.
When I calculate the capital gains tax on the profit, do I take the cost of the shares from when the husband originally bought the shares or when they were transferred to the wife and are there any tax implications for providing money to her children upon the sales of the shares.
Thanks
Paul
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
She’ll have to pay Capital Gains Tax if she sells (‘dispose of’) the inherited shares that have gone up in value since the husband died.
You start with the value on the date of death.
There would be no problem with the gift of cash to the children as long as the 7 years are met.
The amount would not be included back into her estate.
Customer: replied 2 years ago.

Thanks very much.

Therefore, is it correct that I take the cost of the shares that were sold the date when her husband died and not the date when her husband originally bought them?

The wife would also have to live for 7 years after making the gift in order to avoid paying inheritance tax. Is that correct?

Thanks

Paul

Expert:  TaxRobin replied 2 years ago.

Yes, that is correct on both points.

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