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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15917
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My father died in June 2014, and he left a limited company

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Hi. My father died in June 2014, and he left a limited company with the assets to be shared between myself and my 3 sisters. When the business was liquidated I received approximately £66,000 from his limited company. On my self assessment tax return, do I declare this as a dividend, capital gains, or something else? and is there any way I can claim relief going back over previous years?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

Can you confirm that you were not a shareholder in your late father's limited company please and that you received a cash sum of £66,000 from the estate.

Customer: replied 1 year ago.
I became a shareholder only after my father died. I received a cheque of £66600 from the liquidators of the business
Expert:  TonyTax replied 1 year ago.

Thanks.

You appear to have inherited a quarter of your father's shares as opposed to the company being liquidated into his estate and payments to you and your siblings being made therefrom. If that was the case, the cost of the shares for CGT purposes would be their value when your father passed away. Assuming the payment was made after a formal liquidation, ie where a liquidator was appointed, as opposed to an informal liquidation, it is a capital payment. You effectively disposed of your shares and so you should disclose the £66,000 as the proceeds of the liquidation of your shares in the capital gains section of your tax return. I'd be surprised if there was much of a gain.

I hope this helps but let me know if you have any further questions.

Expert:  TonyTax replied 1 year ago.

Just a final note.

I would have expected the accountants to have arranged matters in the most tax efficient manner.

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