CGT on Inherited Shares?

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laila

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I don't seem to be able to find it but I read somewhere on this site recently that one of the benefits of holding shares directly compared to a unit linked fund was that in the case of the share holder dying that the benificiary of the will would inherit the shares without being liable to CGT. Is that correct? and if that is the case is the tax liability not determined by the inheritance threshhold of the beneficiary? Would it be the case that even in excess of the beneficiary's inheritance threshhold shares would not be subject to CGT?
Thanks.
 
From the Revenue Guide to CGT:
7. Cost of Acquisition
  • ...
  • If the asset was acquired by way of an inheritance on a death, by way of a gift or on transfer from a trust, it is the market value at the date of death, gift or transfer that is to be used here.
  • ...
Click to expand...
Of course, an inheritance may be subject to [broken link removed].
 
No capital gains tax arises on death but the fund will be liable to an exit tax at 23%, inheritance tax/CAT may apply on the grossed up fund, this will be payable by the beneficiary of the shares. cat would be payable regardless of how the are held. there is a threshold depending on your relation to the disponer as you mentioned

In relation to the benefits of holding share in a unit linked fund there is an offset available. the exit tax that has been deducted from the policy can be offset against the cat liability arising as a result of the inheritance of this policy

hope this helps
 
bazermc said:
No capital gains tax arises on death but the fund will be liable to an exit tax at 23%
Click to expand...

You mean for unit linked funds 23% of any growth will be deducted in tax?
 
Yes, this is correct - at least for all Gross Funds. It is as if the investment was encashed the day before death.
 
correct jpd the exit tax is very different from CGT
exit tax arises on a exit and cgt arises on a asset disposal (but not in the case of death)

in relation to the inheritance should there be excess exit tax left over say for example there was no cat liability i have no idea as to what would happen that exit tax. could it be recovered, any ideas?
 
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