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Dealing with increase in valuation of life assurance policy 15 years after death.
We have been asked to prepare a 2017-18 tax return for an estate. The individual died in 2003 but it has only recently come to light that there were two life assurance policies in his name. These were valued at £3 700 and £12 000 at the date of death but on encashment have realised £6 500 and £21 000 plus interest.
Generally chargeable events are added to the income of the deceased in the year of death for tax calculation purposes. However given that the event has happened so long after the date of death would this still be correct?
And what happens to the increase in value since the date of death? Does that attract a separate tax charge or does it all fall back to that date?
I look forward to receiving Taxation readers’ assistance.
Query 19 140 – Estate.
Reply by Terry...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
