Readers’ forum: Gift of painting outside client’s will

My client died a few months ago. It has come to light that shortly before her death she said to a close friend: ‘you can have the painting which is hanging over the fireplace in the dining room’.

The friend was a not a beneficiary under her will. It turns out that the painting is much more valuable than my client realised. I’m trying to work out the tax consequences. Had she changed her will then the painting would have attracted the normal CGT uplift on death but been part of the estate for IHT purposes. A lifetime gift would be a market value disposal for CGT but not fall into the estate for IHT purposes. I am aware though I have never dealt with this before that a gift in contemplation of death (donation mortis causa) is treated as being made on death and hence does...