AITI Chartered Tax Adviser

How does death affect capital gains tax?

Death is the ultimate form of CGT planning. When you die, your assets pass, at their market value on the date of your death, to your beneficiaries. This means all inbuilt-gains at your date of death are wiped out. The assets may be liable to inheritance tax.

Any post-death increase in the value of your assets is charged on the beneficiary taking your assets when he/she ultimately disposes of the asset or assets in question. In other words, the base cost of assets acquired by a beneficiary is their value at the date of your death. Your personal representatives are not caught for appreciation in the value of the property during the period from the date of your death to the date the property passes to your beneficiary.