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13 December 2016
Issue: 4580 / Categories: Forum & Feedback

Treatment of dividends and interest on estate inheritance.

My deceased client left her estate to her two sons. They later executed a valid deed of variation with reading back provisions for inheritance tax and capital gains tax. The deed left a cash legacy to the sons using up the nil rate band and the residue on an immediate post-death interest trust for the deceased’s husband to end two years and three months from the date of death or his death (if earlier). When the trust ends the assets pass to the two sons.

The inheritance tax position appears clear. There should be no tax on the estate due to spouse exemption and the husband makes a potentially exempt transfer when the trust ends or if he dies beforehand the value aggregates with his estate. However I am not sure what needs to be done now in terms of capital gains tax and income tax and...

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