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bigduckontax, Accountant
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Are non UK beneficiaries of an Estate (probate) liable to pay

Customer Question

Are non UK beneficiaries of an Estate (probate) liable to pay Capital gains tax on that Estate? The estate's value appreciated between time of death and when it was sold.
Thank you.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help with your question. There is no capital Gains Tax (CGT) on death, all the deceased assets are aggregated and Inheritane tax (IHT) applied. This is at 40% flat rate on anything over 325K. The 325K is inflated by any inter spousal or charitable bequests and if the latter are 10% or more than the IHT rate falls to 36%. As far as capital gains made during administration the following rules apply {HMRC Help Sheet 282): 'During the period of administration, the personal representatives may be liable to Capital Gains Tax (CGT) if they sell or otherwise dispose of any of the assets in the estate. This does not apply when assets are passed to legatees under the terms of the will, and so on. During this period the personal representatives have absolute control over the assets, except those that have been passed to the legatees. They are not bare trustees or nominees for the legatees.' You can find the full text of the Help Sheet here: So, in a nutshell, if the beneficiaries receive the deceased's property no CGT kicks in on the difference between the probate value and the current market value, but if the deceased's assets are sold off at a profit from the probate value than CGT does apply and the executors or administrators must settle this tax, along with IHT, before distribution. So that is the position, it is a matter for the personal representatives of the estate to settle and no liability attaches to beneficiaries whether UK or non UK. This answer takes no account of the taxation position in the regime in which the non UK recipients reside. I do hope that you have found my reply of assistance.
Customer: replied 2 years ago.
Thank you.However, my original question was if non UK resident beneficiaries were liable to pay CGT on the profit made on sale of the asset (I think I mistakenly typed estate) - I. e. An appreciation of the property between time of death and time of sale.
Expert:  bigduckontax replied 2 years ago.
I think you will find that I have covered this. If it is within the administration period and the asset itself is sold by the representatives of the deceased then CGT will apply to any gain from the probate value and be settled by the representatives before distribution. The beneficiaries themselves do not pay the tax, nor indeed are they liable therefor, but as their share of the estate is diminished by the quantum of the tax they effectively suffer. If the beneficiaries receive the asset and then sell it making a gain then they will be liable to CGT on the gain from the probate value or an April 2015 valuation whichever is the later. This April 2015 date is a relatively new rule brought in by the Chancellor. Please be so kind as to rate me before you leave the Just Answer site.
Customer: replied 2 years ago.
Please note that the person holding the grant of representation of probate as well as a all other beneficiaries are non British and non UK residents. Does this affect their position with regards ***** ***** CGT?
Expert:  bigduckontax replied 2 years ago.
Not at all, they are still subject to UK inheritance and taxation law.