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bigduckontax
bigduckontax, Accountant
Category: Tax
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I've got to complete the final tax return for a deceased

Resolved Question:

I've got to complete the final tax return for a deceased person and as part of his probate he had three life policies where there are chargeable gains certificates to declare. What part of those chargeable gains would be part of that final tax return and what sort of percentage would I have to pay on them?
Submitted: 1 month ago.
Category: Tax
Expert:  bigduckontax replied 1 month ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your qyestion.

You personally do not pay any tax on the chargeable event, the deceased's estate might have a liability. However, that would only occur if the aggregated assets on decease exceeded 325K. If the estate is inadequate to meet any Inheritance Tax (IHT) due then it is the Chancellor who dips out!

I do hope that you have found my reply of assistance.

Customer: replied 1 month ago.
Thanks for your response. As the Executor I certainly do have IHT to pay as the estate is just over £1M. I was asking does the Estate have tax to pay (rather than I) as far as the final Tax return is concerned (which is due from April 2016 through to date of death (in February 2017). Each chargeable gain is around £30k apiece. Kind regards, Alan.
Expert:  bigduckontax replied 1 month ago.

Yes, the estate does have to pay. You incur no personal liability.

Customer: replied 1 month ago.
I have to declare the Chargeable Gains as part of his final tax return and pay 20% tax on each of those sums (if they take his income over his personal allowance). Is that what you are saying? Then I deduct that tax repayment off of his IHT account?
Expert:  bigduckontax replied 1 month ago.

Yes the chargeable gains will have to be declared and tax levied at the deceased marginal rate of taxation. Then his assets will have to be aggregated for IHT. This is one of those situations where a sum of money can be taxed twice. The IT cannot be deducted from the IHT bill.

Customer: replied 1 month ago.
Ah okay. My first thought (because I'm ready to complete and submit my IHT return, was to estimate the IT return amount to be made. But then I thought it might be a larger amount than usual due to the Chargeable gains so I thought it would be better to complete that first. But if you are saying I can't deduct it from the IHT account anyway then I don't think I'll bother delaying and just submit it now. Does that sound okay?
Expert:  bigduckontax replied 1 month ago.

It does indeed.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 month ago.

Thank you for your support.