Can I pick your collective brains with a situation I have not come across before.
Situation is this: Will gifts a property subject to tax to beneficiary A. Thanks to the increase in popularity of costal properties that we have seen over the past year or so, the property is selling for a substantial gain. The DV has agreed the DOD value but the IHT on it is still outstanding and will be discharged on sale later in the year.
Client is asking whether the IHT payable on the property can be taken into account in the CGT calculation to reduce the gain, owing to the fact that the tax is specifically charged against the property. Having by and large dealt with tax free gifts to date and certainly not gifts subject to so much IHT and gain, I am not sure whether the IHT paid can be taken into account against the base cost or otherwise.
Any thoughts would be very much welcome.