Readers' forum: Inheritance

I have never been clear on the position for a surviving spouse who inherits chargeable assets on the death of the first spouse.

For capital gains tax purposes lifetime transfers between husband and wife are exempt and the donee inherits the donor’s base cost. But is this the case on death or does the probate value of the deceased’s share replace the original cost?

And for freehold property held as joint tenants I believe the original base cost still applies. But in the case of a joint tenancy will probate value apply?

I look forward to advice from Taxation readers whom I hope will clarify matters here.

Query 19 411– Confused.

Reply by Goston

The value at death becomes the base cost for the estate.

It can indeed be confusing when two rules of tax law appear to contradict each other. As Confused states lifetime transfers between husband and wife are exempt from capital...