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Sam, Accountant
Category: Tax
Satisfied Customers: 7509
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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My father died in Sept 1990. Leaving a small estate on which

Customer Question

My father died in Sept 1990. Leaving a small estate on which no IHT was due or paid. Unknown to us he had a Capital Investment Policy with L&G which he had had for many years and which has been growing for 25 yrs and has now become known. It's value is now £875k. At the time of his death in 1990 we have learned that it was valued at Circa £200k. Can anyone tell me if we are liable to pay IHT or Capital Gains or both, and on what portions. I have been advised by a layman that I will pay IHT on the value of the estate at his death (if any is due given the rates and thresholds back then), and Capital Gains on the rest. Is that correct? if so what would the Capital Gains rate be? Can anyone offer any back of a fag packet calculations.
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.

Can you tell me what you know about the Capital Investment Policy please. Is there life cover attached? If so, on whose life is the life cover drawn? Did it allow for 5% tax free withdrawals per policy year for the first 20 years? Who is the beneficial owner of the policy (not necessarily the life assured)? Who was the beneficial owner of the policy before your father died? I assume it was not mentioned in his will given that you appear not have know of its existence.
Customer: replied 3 years ago.
Thanks for your response. No I do not believe there was a life policy attached. I'm not sure but I don't believe there was a 5% yearly withdrawal allowed. I believe the beneficial owner was my father and now that he has died it is his two beneficiaries, myself and my brother. It was not named in the will which was just a general will stating "all my possessions".
Expert:  TonyTax replied 3 years ago.

I've been searching on Legal and General to see if I can find any information on this type of policy but I cannot find anything, I guess because it is so old. Would it be possible for you to scan and upload any documentation as to how the policy works,eg FAQs or policy facts? Do you have a list of the underlying investments? Without more information, I cannot tell whether any gains would be liable to income tax or capital gains tax and if the value of the fund should have been included in your later father's estate for Inheritance Tax purposes.
Expert:  TonyTax replied 3 years ago.
I will be away from my desk for client meetings but I will be back early evening to look at any more information you may be able to give me.
Customer: replied 3 years ago.

Thanks. I can hopefully load up the document tomorrow.

Expert:  TonyTax replied 3 years ago.
Thanks. The more information I have the better. L & G may be able to give you a web page on their site that I can refer to.