Sad reacquisition

22 November 2006

Issue: 4085 / Categories: Forum & Feedback

Our client gifted a large number of shares to his wife. Tragically, within 30 days of the gift, the wife died. Our client was the only beneficiary of the wife's estate and accordingly the shares in question were, on the wife's death, inherited by our client. Our initial reading of the rules is that the inheritance is treated as an acquisition at probate value on the date of death (TCGA 1992, s 62(4)).

This then brings the 30-day matching rule (TCGA 1992 s 106A(5)) into play with the result that on the face of it the original gift to the wife is matched against the shares subsequently inherited from the wife's estate. However in view of the fact that the estate might take several months or even years to be finalised we did wonder whether the inherited shares should only be taken into account within our client's capital gains tax calculations following their appropriation to him from the estate and accordingly any computations for previous disposals (in this case the spouse gift) should remain undisturbed.
Do readers have any views on which of these two possibilities is correct?
Query T16 916 — Mortified.

Reply by N.K.:

TCGA 1992 s 62(4) confirms that 'on a person acquiring any asset as legatee (as defined in s 64) ... no...

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