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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Liability to date/death: deceased competent to dispose: Example 1

Mr A is resident, ordinarily resident* and domiciled in England at the date of his death. He owns chattels, shares, a half interest in a plot of land and a half share in the matrimonial home. He has a balance standing to his credit at the Bank and is owed £500 by his brother-in-law. The half interest in the plot of land is held by him as tenant-in-common but the half share in the matrimonial home is held by him as joint tenant, with his wife holding the remaining interest.

Mr A can direct by provisions in his will to whom all the above-mentioned assets except his interest in the matrimonial home should pass. The interest in the matrimonial home would automatically pass to his wife as the surviving joint tenant. Even if he purported to direct in his will how this interest should pass that direction would be ignored.

All his assets, including his interest in the matrimonial house held as a joint tenant, will be assets of which he was `competent to dispose’ for Capital Gains Tax purposes. On his death

  • there will be no chargeable occasion in respect of any of the assets
  • apart from the interest in the joint tenancy the assets will all pass to his personal representatives. They will acquire those assets for capital gains purposes at market value at the date of death, see CG30730.
  • the interest in the joint tenancy will pass to his wife. For Capital Gains Tax purposes she will also acquire this interest at market value at the date of death. Her interest in the matrimonial home will thereafter consist of one half acquired at cost and one half acquired at market value at the date of death.

*For 2013/14 and later years ordinary residence is no longer relevant.