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HMRC internal manual

Capital Gains Manual

Death and Personal Representatives: Liability to the date of death: Liability to date/death: Donatio Mortis Causa


A donatio mortis causa is a gift made in contemplation of the death of the donor which is intended to take effect only if the donor dies. If the donor recovers from his or her illness, etc., or if the donee dies first, then the gift is to have no effect i.e. it is void. If the gift is made in contemplation of death, it is presumed to be a donatio mortis causa even if the donor does not say that the gift is intended to be conditional on death occurring.

Since the individual has given away these assets before his or her death, he or she is not able to dispose of them by will. They are therefore not `assets of which the deceased was competent to dispose’.


No gain /loss TCGA92/S62 (5)

For Capital Gains Tax purposes the practical effects of a donatio mortis causa are very similar to those for assets transferred on death. However the legislation arrives at this result in a different way. Instead of deeming there to be no disposal of the asset by the deceased, the legislation in TCGA92/S62 (5) says that no chargeable gain accrues to the person making the disposal. As allowable losses are to be computed in exactly the same way as gains, TCGA92/S16 (1), it also follows that no loss is allowable in respect of such a gift.


Position of donee

As TCGA92/S62 (5) merely removes the charge on the donee this means that for all other purposes the transfer by donatio mortis causa, being a gift, takes place at market value, TCGA92/S17 (1). Accordingly the donee is deemed to have acquired the asset at market value.


Donee: husband and wife or civil partners

Where a gift is made from husband to wife or vice versa, or from one civil partner to the other, normally TCGA92/S58 (1) would say that the disposal should occur at such a figure as to give rise to no gain/no loss and TCGA92/S17 (1) would not apply. However, in the case of a donatio mortis causa this rule is disapplied by TCGA92/S58 (2). Thus all gifts by way of donatio mortis causa are dealt with in the same way.


Acquisition date for donee  TCGA92/S64 (2)

A person acquiring an asset under a donatio mortis causa is treated as acquiring the asset at the time of the donor’s death, TCGA92/S64 (2). In view of this the market value at which the asset is acquired is the market value at the date of death


See also CG31130 regarding the treatment of the recipient as a legatee for some purposes.