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 TonyTax Your Own Question
TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

My wife died in late April this year. I am executor estate and also the sol

Resolved Question:

Hello
My wife died in late April this year. I am executor for her estate and also the sole beneficiary.
Hopefully Probate will be with me within the next 2 weeks.
She had a Stocks and Shares ISA which I intend to transfer to my ISA under an APS (Additional Permitted Subscription). This will be done by a transfer form and spousal declaration.
I understand that once someone dies the ISA wrapper is removed from the asset and subject to potential Income Tax and Capital Gains.
At present all the shares and funds in the portfolio are showing significant losses since the initial valuation for Probate earlier on in the year.
My question is this:
As the portfolio is currently temporarily outside the ISA wrapper am I able to utilise these Capital Losses to my advantage for future use against future gains for my investments outside my ISA?
If so how would this be done and at what stage of the process?
I believe that any potential sales depend the timing and on who is making the sale:
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi. The cost of the ISA shares you have inherited for CGT purposes is their probate value. In order to utilise the losses that have accrued since your wife passed away, you would need to sell the shares. That would not preclude you from using the ISA allowance you inherited from your wife. The shares she held in an ISA will be taken out of the ISA wrapper. You won't be putting those shares back into your own ISA unless you don't sell them (in which case you won't have realised any losses) and you use the same provider your wife did. You will have the option to invest an amount of cash equivalent to the value of your late's wife's ISA when she died into a new ISA without that impacting on your own personal ISA allowance for the current tax year, 2015/16. Take a look at the Nationwide and Which notes on this here and here respectively. I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 2 years ago.
You have up to three years to utilise the inherited ISA allowance.
Customer: replied 2 years ago.

Thank you for that.

I am guessing that, as I wish to transfer my late wife’s ISA Probate value into my ISA ultimately, it would be advantageous to generate these Capital Losses to utilise in the future. Would you concur?

I realise there will be costs involved in selling shares etc but hopefully these will be minor compared to the Capital Losses banked.

Just to clarify, if I did decide to sell all or part of the holding, it would need to be at a date after Probate was granted and not before. Would you agree?

Thanks

Expert:  TonyTax replied 2 years ago.
I cannot tell you what to do but I'd be inclined to realise the losses for future use.

I would wait until probate is granted before selling any of your inherited assets but the date of valuation will be the date of your wife's death.
TonyTax and other Tax Specialists are ready to help you