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The issues of relying on probate value and how to avoid them

Robert Lillycrop considers how to determine the capital gains tax base cost of an inherited asset, including practical steps to help you

When your client disposes of an inherited asset, do you assume the base cost is the same as the probate value? This assumption may well give the right answer – but in some cases it may not, and therein lies a trap for the unwary.

The Inheritance Tax Act 1984 (IHTA 1984) states that on death, inheritance tax (IHT) will be charged as if, immediately before that death, the individual had made a transfer of value equal to the value of the estate immediately before death (s4(1)).