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Capital gains and losses in the year of death

An individual is taxable in the usual way on chargeable gains arising in the tax year of death, which is the period starting with the previous 6 April and ending on the date of death.

The normal computational rules apply to calculate those gains. The full annual exemption and all applicable reliefs are available. The rates of tax are applied in the usual way, with the lower rates of 10%, and 18% for residential property, available to the extent of the unused basic rate band. If the individual dies early in the tax year, income for the year is likely to be lower with the consequence that more of the basic rate band will be available for capital gains.

Remember that the relevant date for capital gains tax is the date of contract. Where death occurs between exchange of contracts and completion, the contract remains valid and the personal representatives