CGT and probate
Discussion
Hi, I'm not sure about tax implications on this.
Sadly, my mother died last July having spent the last five years of her life in a care home with severe dementia. Her estate was very simple, just an investment account and a bank account.
We applied for probate last August, so we are 10 months in and expect it to be finalized within the next couple of weeks. I am the sole beneficiary and had POA while she was alive.
I believe that the solicitor dealing with it on my behalf will contact the bank, etc. They will then forward the monies to him and he will forward it to me. Is that correct?
The money in her investment account has grown considerably since she died, thanks to the people at Intelligent money
Will I have to pay tax on the growth, even though it's not actually mine until probate is granted?
I'm not complaining, just curious and also grateful that I will have some money coming my way.
Sadly, my mother died last July having spent the last five years of her life in a care home with severe dementia. Her estate was very simple, just an investment account and a bank account.
We applied for probate last August, so we are 10 months in and expect it to be finalized within the next couple of weeks. I am the sole beneficiary and had POA while she was alive.
I believe that the solicitor dealing with it on my behalf will contact the bank, etc. They will then forward the monies to him and he will forward it to me. Is that correct?
The money in her investment account has grown considerably since she died, thanks to the people at Intelligent money
Will I have to pay tax on the growth, even though it's not actually mine until probate is granted?I'm not complaining, just curious and also grateful that I will have some money coming my way.
If it was that simple you could have done it yourself with a paralegal service.
You work out the value of the estate, its liabilities, fill in a tax form, get some help with court papers, pay the court fees, you get documents back which then means the institutions will release the funds.
Solicitors take an age to do this.
You work out the value of the estate, its liabilities, fill in a tax form, get some help with court papers, pay the court fees, you get documents back which then means the institutions will release the funds.
Solicitors take an age to do this.
Grandad Gaz said:
Hi, I'm not sure about tax implications on this.
Sadly, my mother died last July having spent the last five years of her life in a care home with severe dementia. Her estate was very simple, just an investment account and a bank account.
We applied for probate last August, so we are 10 months in and expect it to be finalized within the next couple of weeks. I am the sole beneficiary and had POA while she was alive.
I believe that the solicitor dealing with it on my behalf will contact the bank, etc. They will then forward the monies to him and he will forward it to me. Is that correct?
The money in her investment account has grown considerably since she died, thanks to the people at Intelligent money Will I have to pay tax on the growth, even though it's not actually mine until probate is granted?
I'm not complaining, just curious and also grateful that I will have some money coming my way.
Sorry about your Mother.Sadly, my mother died last July having spent the last five years of her life in a care home with severe dementia. Her estate was very simple, just an investment account and a bank account.
We applied for probate last August, so we are 10 months in and expect it to be finalized within the next couple of weeks. I am the sole beneficiary and had POA while she was alive.
I believe that the solicitor dealing with it on my behalf will contact the bank, etc. They will then forward the monies to him and he will forward it to me. Is that correct?
The money in her investment account has grown considerably since she died, thanks to the people at Intelligent money
Will I have to pay tax on the growth, even though it's not actually mine until probate is granted?I'm not complaining, just curious and also grateful that I will have some money coming my way.
When your Solicitor applies for Probate any investment numbers will already have been used by them to see if any IHT was applicable and if so a provisional amount would have been paid to HMRC.
I'm making an assumption that none was in fact due as the total was beneath any allowance your Mother would have been entitled to.
As such when probate is granted , the Solicitor will indeed collate all the sums currently from your Mothers estate ( including any capital growth ) and assuming these still remain below any such allowance will proceed to disperse the new proceeds to yourself.
You will pay no Capital Gains tax either way and as above her Estate no Inheritance tax.
alscar said:
Grandad Gaz said:
Hi, I'm not sure about tax implications on this.
Sadly, my mother died last July having spent the last five years of her life in a care home with severe dementia. Her estate was very simple, just an investment account and a bank account.
We applied for probate last August, so we are 10 months in and expect it to be finalized within the next couple of weeks. I am the sole beneficiary and had POA while she was alive.
I believe that the solicitor dealing with it on my behalf will contact the bank, etc. They will then forward the monies to him and he will forward it to me. Is that correct?
The money in her investment account has grown considerably since she died, thanks to the people at Intelligent money Will I have to pay tax on the growth, even though it's not actually mine until probate is granted?
I'm not complaining, just curious and also grateful that I will have some money coming my way.
Sorry about your Mother.Sadly, my mother died last July having spent the last five years of her life in a care home with severe dementia. Her estate was very simple, just an investment account and a bank account.
We applied for probate last August, so we are 10 months in and expect it to be finalized within the next couple of weeks. I am the sole beneficiary and had POA while she was alive.
I believe that the solicitor dealing with it on my behalf will contact the bank, etc. They will then forward the monies to him and he will forward it to me. Is that correct?
The money in her investment account has grown considerably since she died, thanks to the people at Intelligent money
Will I have to pay tax on the growth, even though it's not actually mine until probate is granted?I'm not complaining, just curious and also grateful that I will have some money coming my way.
When your Solicitor applies for Probate any investment numbers will already have been used by them to see if any IHT was applicable and if so a provisional amount would have been paid to HMRC.
I'm making an assumption that none was in fact due as the total was beneath any allowance your Mother would have been entitled to.
As such when probate is granted , the Solicitor will indeed collate all the sums currently from your Mothers estate ( including any capital growth ) and assuming these still remain below any such allowance will proceed to disperse the new proceeds to yourself.
You will pay no Capital Gains tax either way and as above her Estate no Inheritance tax.
You are correct, there was no inheritance tax to pay. However, I think I will have to pay tax on the investment growth, as it is quite a significant increase since she died last year. I don't know the exact amount but, it's somewhere in the region of £100k
Grandad Gaz said:
Thank you for the reply. That's very useful, as indeed the link posted by Exiled Imp.
You are correct, there was no inheritance tax to pay. However, I think I will have to pay tax on the investment growth, as it is quite a significant increase since she died last year. I don't know the exact amount but, it's somewhere in the region of £100k
I'm just finalising a relatives affairs as her Executor ( with Solicitor assistance ) but in her case there was IHT due so as such any potential CGT tax I think was mitigated.You are correct, there was no inheritance tax to pay. However, I think I will have to pay tax on the investment growth, as it is quite a significant increase since she died last year. I don't know the exact amount but, it's somewhere in the region of £100k
I've just looked at her investments and whilst they had increased since death it was far less than in your case anyway so I had no choice but to agree to the 40% IHT tax hit.
I dimly recall reading something that if someone inherits the physical shares ie not sold and converted to cash , then no CGT is payable until said inheritor starts to then sell them which of course you could do in stages albeit not that the CGT allowance is going to get any bigger !
IMPCbC said:
Hi Gary,
I’ve resent the probate figures from July. Use these to take advice on the position.
Regards
Adam
Thanks Adam, it's always a pleasure talking to you and you have done an amazing job I’ve resent the probate figures from July. Use these to take advice on the position.
Regards
Adam
I am staggered by how much her investment with IM has gone up.Well done to you and the team!
Alscar, You have also confirmed what Adam said.
alscar said:
I'm just finalising a relatives affairs as her Executor ( with Solicitor assistance ) but in her case there was IHT due so as such any potential CGT tax I think was mitigated.
I've just looked at her investments and whilst they had increased since death it was far less than in your case anyway so I had no choice but to agree to the 40% IHT tax hit.
I dimly recall reading something that if someone inherits the physical shares ie not sold and converted to cash , then no CGT is payable until said inheritor starts to then sell them which of course you could do in stages albeit not that the CGT allowance is going to get any bigger !
And, crucially, I think that if shares are transferred the CGT calculation starts for the valuation of said shares at the date of transfer ie the value is reset to zero on said transfer for tax purposes. Any capital gain is calculated by reference to the value at the time the shares are transferred and the value at the time of future disposal.I've just looked at her investments and whilst they had increased since death it was far less than in your case anyway so I had no choice but to agree to the 40% IHT tax hit.
I dimly recall reading something that if someone inherits the physical shares ie not sold and converted to cash , then no CGT is payable until said inheritor starts to then sell them which of course you could do in stages albeit not that the CGT allowance is going to get any bigger !
R,
The Leaper said:
And, crucially, I think that if shares are transferred the CGT calculation starts for the valuation of said shares at the date of transfer ie the value is reset to zero on said transfer for tax purposes. Any capital gain is calculated by reference to the value at the time the shares are transferred and the value at the time of future disposal.
R,
Yes I think that’s the case too. R,
GG’s original question did get me going through my papers as in my relatives cases the proceeds being allocated will all be in cash. Shares were previously sold from their asset class funds ( to protect the profit / total quantum ) and simply put into a money market fund.
As some of this was previously held in ISA’s they would also be protected from any CGT should that scenario loom.
I’m still pretty confident that the IHT just paid should account for the vast majority of any tax due and a back of envelope calculation on the potential CGT should I have got that wrong should only be minimal.
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