CG31180 - Death and personal representatives: legatees and their treatment: computing gains arising to legatees
Normal rules apply
When an asset has vested in a legatee the capital gain or allowable loss on a subsequent disposal of the asset accrues to that legatee. In computing that gain or loss the normal Capital Gains Tax rules should be applied remembering that the asset is treated as acquired at the date of death at the market value or the appropriate fraction of the market value at which the assets passed to the personal representatives on that date, see CG31140.
Unused losses arising to the deceased before the date of death or to the personal representatives may not be brought forward for set-off against any gains arising to the legatee.
No deduction may be allowed in the computation of the legatee's gain for the expenditure incurred by the personal representatives in establishing title to the assets, see CG30550. But a deduction is due for the costs of transferring the asset from the personal representative to the legatee.
Expenses of transfer
TCGA92/S64 (1)
Where a person
- makes a disposal of a right or interest in or over an asset
and
- that person acquired his or her interest as a legatee, see CG31100,
then TCGA92/S64 (1) provides for a deduction to be made in computing the capital gain in respect of certain expenses arising on the transfer of the asset to him or her.
The expenditure for which a deduction may be claimed is
- any expenditure relating to the transfer of the asset from the personal representative that the legatee has incurred and which falls within TCGA92/S38 (2) - in other words what is normally described as incidental expenditure
and
- any expenditure of a similar nature incurred by the personal representatives in relation to the transfer of the asset to the legatee