Managing trusts and tax

Tax reduction on a substantial inheritance

After difficult negotiations with HM Revenue & Customs, the value of the company shareholding was agreed for Inheritance Tax purposes.  A purchaser subsequently came forward with a significantly higher offer, which would have resulted in a substantial capital gains tax bill for the estate.  Mark Politz considered the options and advised the executors to transfer the beneficial ownership of the Deceased’s shares to the beneficiaries before the sale, so that the gains would be made by them, rather than by the estate.  The result was a capital gains tax saving of at least £250,000.  Some of the beneficiaries were non-UK resident and therefore not liable to UK capital gains tax on the shares.  For the UK-resident beneficiaries, the capital gains tax was less than the amount that would have been payable on a sale by the estate.

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