Yes, CGT payable by the estate is deductible in arriving at taxable value of inheritance (as MF1 points out).
For example, A dies and instructs in their will that their house be sold and proceeds distributed to B & C equally. In CA24, house is valued at 150k (value at date of death). House sold by executors six months later for 200k. Executors must pay 16.5k in CGT (200-150 @ 33%). Leaving 183.5k to distribute in the estate. Say for convenience, solicitors & auctioneers fees are 3.5k, then B&C divide 180k between them - the taxable value of their inheritance is 90k each.
Thank you. Initially, I was looking at the long version of the IT38 form, and, e.g. using the figures in your example and say 1 beneficiary to make the calculations easier,, you declare (section 7 Taxable Value of Benefit) an Absolute Interest of 200,000, deduct costs of say 3.5k to get a Taxable Value of 196,500. Then in part 8 Self Assessment you deduct the Group Threshold (i.e. 15,075) to arrive at a Taxable Excess of 181,425. This gives a tax payable of 59,870. You can then in section 8.8. Credits Deductible deduct CGT paid, i.e.16.5k, giving you Net tax payable of 43,370.
But if the CGT paid is deductible not as a tax credit but in arriving at the taxable value of the inheritance the figures are Absolute interest-legal fees-group threshold-CGT paid giving a taxable value of (200,000-3.500-15076-16500)=164,925 on which CAT of 54,425 would be payable. Which is a significant difference.
In my case, the beneficiaries, who are all young people, were sent the short IT38S form by Revenue and have asked the executors to calculate how much CAT they must pay, so if CGT paid is deductible in arriving at the taxable value of the inheritance and not deductible as a tax credit they pay a higher amount in tax?