Lurking in the depths of the Capital Gains Tax Manual on H M Revenue and Customs' website is the Extra Statutory Concession D5.
While it sounds achingly tedious, it can provide some remarkable tax saving for the beneficiaries of an estate where property is sold pregnant with gain.
To summarise, it is possible for the principal private residence relief from capital gains tax to apply to the personal representatives of a deceased's estate acting on behalf of the beneficiaries if certain conditions are satisfied, namely:
- immediately before and immediately after the death of the deceased, one or more beneficiaries have occupied the property as their only or main residence
- the beneficiary is (or the beneficiaries are between them) entitled to at least 75% of the net proceeds of disposal (that is the proceeds of the disposal realised by the personal representatives less any incidental costs of disposal) or to an interest in possession in 75% or more of these proceeds and
- the personal representatives make a claim for private residence relief.
The availability of the relief is another good reason to appoint experienced solicitors as executors of your Will or if you are an executor or administrator of an estate to instruct experienced solicitors to administer the estate on your behalf.
If you think ESC D5 may apply to an estate please call Roderick Smith on 020 7288 4732. If your advisor has missed it, there may be a remedy available to you.