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Readers’ forum: Falling values

29 September 2020
Issue: 4762 / Categories: Forum & Feedback
Tax complications from falling share values after death.

A client died earlier this year. His estate was worth about £2m of which a large part comprises quoted shares. Since his death the stock market has fallen and the shares lost value. We therefore completed a form IHT35 and claimed a repayment of inheritance tax based on the difference between the sale proceeds of the shares and the original date of death valuations. The share values were ascertained for inheritance tax so the same value must now be used for capital gains tax purposes.

The share sale proceeds exceeded £500 000 so a tax return is required. In calculating the gain there will in any event be a loss because the IHT35 did not reflect stockbrokers’ charges and incidental costs of sale whereas the sale proceeds do. Further statement of practice 2/04 will increase that loss because this allows for the incidental...

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