IHT payable on capital gain?

The deceased had a life interest in a trust fund and as a result of his death, CGT has had to be paid.

The client is arguing that the figure that should have been reported to HMRC on the IHT forms is the value less the CGT. Death triggered the CGT payment but if the full value is included with the IHT form, the they are paying CGT and IHT on the same amount.

However, is it arguable that at the date of death, the deceased had the full value in their estate?

Katie Kenealy

It is unusual for CGT to be triggered by death. In cases where it is, the tax payable may be deductible from the value of the property for IHT purpose, if the CGT is paid by the person who has become entitled to the property - see s. 165(2) IHTA.

Paul Davies
Clarke Willmott LLP

Can you explain how the death triggered the gain?
Andrew Goodman
Osborne Clarke LLP