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HMRC internal manual

Capital Gains Manual

Death and Personal Representatives: Introduction to taxation consequences: Personal representatives and taxation

Personal representatives are concerned with three distinct areas of taxation, viz.,

  • Income Tax and Capital Gains Tax liabilities to the date of death
  • the Inheritance Tax liability arising as a result of the death


  • Income Tax and Capital Gains Tax liabilities arising in the period of administration.


Liabilities to date of death

The personal representatives must settle the liability of the deceased up to the date of death with the responsible office. See TSEM7204. This will include any Capital Gains Tax on any transactions occurring in the year of death prior to the date of death and any open capital gains liabilities for earlier years. See CG30320 - CG30430 for further details.

Inheritance Tax

The personal representatives will need to agree any Inheritance Tax liability that arises as a result of the death with HMRC Trusts & Estates IHT. You may need to contact HMRC Trusts & Estates IHT to check a number of points that are relevant to Capital Gains Tax. These include

  • knowing when the Inheritance Tax liability was finalised and paid in order to check when residue was ascertained, see CG30800
  • knowing whether the values of assets were ascertained for Inheritance Tax purposes in order to establish whether a Capital Gains Tax acquisition cost has been determined, see CG32220 - CG32230
  • knowing whether HMRC Trusts & Estates IHT accepted a deed of disclaimer or variation as valid and how they treated any late election relating thereto in order to decide on the Capital Gains Tax consequences of any such deed, see CG31522 and CG31669.


Administration period

The personal representatives are responsible for settling any Income Tax liability on untaxed income arising to the estate in the administration period. Similarly, if the personal representatives sell any chargeable assets in this period, otherwise than as bare trustees, see CG34300, they must settle any liability to Capital Gains Tax. Until this is done the period of administration will continue.

See TSEM7204 for guidance on which office should deal with the administration period. The bigger and more complex estates are dealt with by HMRC Trusts & Estates Cardiff, See TSEM7376 and TSEM7406. In any case where the residue of the Estate will be held on trust at the end of the administration TSEM7366 requires form 980 to be issued to HMRC Trusts & Estates.