Capital gains tax uplift on death

It is important to understand how Capital Gains Tax (CGT) applies when someone dies, particularly for personal representatives and those who inherit assets.

As a general rule, there is no CGT charge on death. Instead, assets owned by the deceased are treated as passing at their market value at the date of death. This effectively rebases the asset for CGT purposes, meaning any gain arising during the deceased’s lifetime is not carried forward.

When the estate is administered, beneficiaries are treated as acquiring the assets at that same market value. If they later dispose of them, CGT is calculated based on any increase in value from the date of death.

During the administration period, personal representatives may be liable to CGT if they sell or dispose of assets. They can also benefit from the Annual Exempt Amount in the year of death and the following two tax years.

Any CGT liabilities arising before death remain payable and must be settled by the personal representatives.

Although no CGT arises on death, Inheritance Tax can still apply depending on the value of the estate.

If you need tax advice, or want to chat to us about Wealth, Wills or Probate, give our expert and friendly team a call on 01380 723692 or email us here.