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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5143
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am executor, and inheritor of my mother's estate, that is

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I am executor, and inheritor of my mother's estate, that is currently going through probate and is in the NIL IHT band. Part of the estate is shares. Two queries :
1. If the shares show a capital gain above the annual exemption limit between the probate value and their value when ownership passes to me is CGT declarable/payable when the shares pass to my ownership or only when I eventually dispose of them to a third party ?
2. Do I as executor have to include dividends in my personal tax return that accrue to the shares between date of death and when ownership passes to me ?
Hello and welcome to the site. Thank you for your question.

You would only declare capital gain when it is realised by you, i.e. when you sell those shares in due course. It is at that point you would work out chargeable gain based on probate value and pay CGT if any.

If the estate is in receipt of income in the form of dividends on shares held at the time of death, thereis no further tax due on that income as tax would have been deducted at source (albeit in the case of dividends notional tax).

More information on this can be found here

I hope this is helpful and answers your question.

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Customer: replied 3 years ago.

However if I as executor am liable to the higher rate of tax then do I have to declare the dividends received between date of death and when the shares pass to me and pay the extra tax.

Peter, thank you for reply.

You would only inherit the shares once they have been passed to you. Until such time, they form part of the estate and therefore you would not declare those dividends in your tax return.

I hope this is helpful. and other Tax Specialists are ready to help you
I thank you for accepting my answer.

Best wishes.