Tax Credit on UK Chargeable Event Gains Assessable on Executors?

Trusts Discussion
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I wonder if any of the esteemed contributors here can answer this query for me…

UK-based investment bond held in deceased’s estate is to be surrendered giving rise to a chargeable event. Death occurred in previous tax year so the gain is assessable on the executors. My query is simply whether the usual 20% tax credit will accompany the gain?

On one hand I have all of the guidance I can find online from the main providers - and from the Chartered Institute of Insurers - as well as HMRC’s notes to the SA900 stating that (except in a few particular, very rare circumstances) the tax credit will be available to executors.

On the other hand I have my tax software’s calculation - presumably based on HMRC’s - not giving the tax credit, Macintyre Hudson’s Yellow Tax Guide (albeit I can’t seem to find an up-to-date edition) stating that personal representatives don’t get the credit, and s530 of ITTOIA 2005 referring curiously specifically to “individuals and trustees” getting it.

If anyone has a definitive answer - and ideally a definitive source - I would be most grateful.

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The tax credit would be available to the Executors. ITTOIA 2005 s 466/530 and see ITPM 3240: “Gains which, if attributed to an individual, would not be treated as though basic rate tax had been paid, are charged at basic rate in the hands of the personal representatives. Contracts that may give rise to such gains are considered at IPTM3810”.

Malcolm Finney

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