Article Summary
This guidance note provides an overview of the capital gains tax position for a deceased individual. It explains that the normal rules apply for calculating gains and losses arising in the year of death, with the full annual exemption and applicable reliefs available. Any losses from that year can be carried back against gains in the three prior years. The key point is there is a tax-free uplift to market value for the assets still owned at death, meaning unrealised gains are wiped out. So if assets have been held a long time and have substantial latent gains, it is often tax-efficient to retain them until death rather than sell them. This avoids the double charge to both capital gains tax and inheritance tax. The note covers which assets do and do not qualify for the uplift. It would help a tax professional advise clients on planning in the period leading up to death.