Our mother died and left each of her six children an equal share of her estate. Two of the children are executors. The gain on the sale of assets is subject to capital gains tax (CGT) which, I understand, is paid by the estate. In calculating the CGT due, do we use the allowances of just two executors or all six beneficiaries?
Arthur Weller replies:
Assets that pass to the personal representatives are acquired by them at market value at the date of death. Any gains arising on a disposal of assets by the personal representatives are calculated by reference to the sales proceeds less the value at death. The personal representatives are entitled to one annual exempt (AE) amount (currently £12,300) against any gains on their disposals in the tax year of death and the next two tax years, but no later. Therefore, it might be a good idea to transfer the property to all six beneficiaries before onward sale to get the benefit of six AEs.