CGT on VCTs during administration

Good morning

I have an estate where there were a large amount of VCTs owned by the deceased. These have been sold for a gain during the administration period and I had assumed that they lost their exempt status upon death. The Executor has queried this. I have looked on HMRC’s manual and also called the technical team but they said they would need to look into it and call me back. No call yet. Does anyone know whether VCTs stay CGT exempt or whether they lose this exemption upon the death of the shareholder?

Many thanks

Hi Afonwy,

My understanding is that the sale has to be by an individual - see rules. Executors or PRs are not ‘an individual’ and so CGT relief would be lost. However, the share’s base cost would be probate value and any CGT deferred against other disposals, when the holding was brought, is distinguished. If the shares had passed to beneficiary income tax and cgt relief would have been available.

If disposal relief is due, you will not have to pay CGT on any gain you make on the disposal of VCT shares. The following conditions have to be met:

  • relief is limited to acquisitions not exceeding £200,000 worth of VCT shares in any one tax year (£100,000 for the year 2003 to 2004 and earlier years)
  • you’re an individual (not a trustee)
  • you’re 18 or over at the date of disposal
  • the company was an approved VCT both when you acquired the shares and when you disposed of them
  • you acquired the shares for commercial reasons and not as part of a tax avoidance scheme

Lucy Orrow CTA TEP
Lambert Chapman LLP

Hi Lucy

Thank you. I saw the individual and that was my understanding but the seeds of doubt were put into my mind!






I agree with Lucy, for disposal relief to apply requires disposal by an individual.

On death, any deferred capital gains (arising from memory pre 2004) are wiped out.

Malcolm Finney