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Capital Gains Tax and Estate Planning: Integration Strategies for Tax Advisors

· 21 min

Executive Summary

The post-Finance Act 2025 capital tax landscape demands that practitioners treat Capital Gains Tax and Inheritance Tax as components of a single integrated system. Unified CGT rates of 18% and 24% from 30 October 2024, Business Asset Disposal Relief rising to 18% by April 2026, and the permanent reduction of the annual exempt amount to GBP 3,000 have fundamentally altered the lifetime disposal calculus. Simultaneously, APR and BPR reforms from April 2026 introduce a GBP 2.5 million combined allowance with 50% relief thereafter, while pension death benefits enter the IHT net from April 2027. This article provides a systematic framework for evaluating the CGT-IHT interaction across key planning mechanisms -- the base cost uplift on death, holdover relief, deeds of variation, and spouse transfers -- equipping practitioners with decision criteria and worked examples for optimised client outcomes.

1. The Integrated Capital Tax System

Every estate planning decision carries Capital Gains Tax consequences, and every CGT mitigation strategy affects Inheritance Tax outcomes. Professional practice has historically treated these as separate disciplines, with specialist advisors operating in silos. The legislative changes enacted through Finance Act 2025 make this compartmentalised approach untenable.1

The convergence of four significant reforms creates compounding complexity. First, the unification of CGT rates at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers across all asset classes from 30 October 2024 eliminated the previous differential between residential and non-residential property gains.12 Second, BADR rates are rising to 14% from 6 April 2025 and 18% from 6 April 2026, eroding the CGT advantage of lifetime business disposals.13 Third, the permanent reduction of the annual exempt amount to GBP 3,000 from 2024-25 -- down from GBP 12,300 in 2022-23 -- substantially diminishes the efficacy of incremental lifetime disposals as a CGT management tool.4 Fourth, the freezing of IHT nil-rate bands at GBP 325,000 and GBP 175,000 until at least April 2031 ensures that fiscal drag continues to bring more estates within the IHT charge.5

Layered upon these rate and threshold changes are structural reforms to the IHT system itself. The residence-based IHT regime, enacted from 6 April 2025, replaces the domicile-based system with a long-term UK resident test requiring UK tax residence for at least 10 of the previous 20 tax years.6 Agricultural Property Relief and Business Property Relief reforms from April 2026 introduce a combined GBP 2.5 million allowance for 100% relief, with 50% relief on qualifying assets above that threshold.7 Pension death benefits will be included in the deceased's estate from April 2027, with potential combined effective tax rates approaching 67%.89

The legislative framework governing this interaction rests on two principal statutes: the Taxation of Chargeable Gains Act 1992 and the Inheritance Tax Act 1984. The critical connecting provisions -- the base cost uplift on death (TCGA 1992 s.62), holdover relief on gifts (ss.165 and 260), deed of variation mechanics (s.62(6)), and spouse transfers (s.58) -- each create opportunities and risks assessable only through simultaneous CGT and IHT analysis.

2. The Base Cost Uplift: The Most Powerful CGT Planning Tool

The base cost uplift on death remains the single most valuable mechanism at the intersection of CGT and estate planning. Its operation is deceptively straightforward, but its strategic implications are profound, particularly when combined with IHT reliefs.

2.1 The Statutory Mechanism

Under TCGA 1992 s.62(1), death is not an occasion of charge for CGT purposes.10 Assets are deemed acquired by the personal representatives at market value at the date of death (s.62(1)(a)). This deemed acquisition -- the "base cost uplift" -- effectively eliminates all unrealised capital gains accrued during the deceased's lifetime.1011 When personal representatives subsequently transfer assets to legatees, that transfer is on a no gain/no loss basis, meaning the legatee acquires the asset at market value at death.

The complementary provision in TCGA 1992 s.274 ensures administrative coherence: where an asset's value has been ascertained for IHT purposes on death, that value is conclusive for CGT purposes.12 A single valuation exercise at death therefore determines both the IHT liability and the CGT base cost for beneficiaries. This carries a tactical implication: any negotiation with HMRC over probate values simultaneously adjusts the beneficiaries' CGT base cost.

2.2 The BPR and APR Interaction

The most underappreciated feature of the base cost uplift is that it applies regardless of whether IHT is actually payable. Where business assets qualify for 100% Business Property Relief, the IHT charge is reduced to nil -- but the CGT base cost is nonetheless uplifted to market value at death.13 The same applies to assets qualifying for 100% Agricultural Property Relief and to assets passing under the spouse exemption (IHTA 1984 s.18).14

This creates a powerful planning principle: for highly appreciated assets qualifying for full IHT relief, retention until death produces the optimal combined tax outcome. The estate suffers no IHT charge (by virtue of the relief), and the beneficiaries acquire the asset at current market value (by virtue of s.62). The aggregate tax cost is zero.

From April 2026, this calculus requires refinement. Assets within the GBP 2.5 million combined APR/BPR allowance continue to receive 100% relief and the full base cost uplift, making retention optimal.7 However, qualifying assets exceeding the GBP 2.5 million threshold face an effective IHT rate of 20% (50% of the 40% rate), which must be weighed against the CGT cost of lifetime disposal. This comparative analysis is addressed in Section 6.

2.3 Personal Representatives and the Administration Period

Personal representatives are entitled to the CGT annual exempt amount of GBP 3,000 for the tax year of death and the two subsequent tax years.4 Gains arising during the administration period are chargeable at the flat rate of 24% applicable to trustees and personal representatives.1 Strategic timing of asset disposals during administration can utilise these AEAs, although the reduced quantum of GBP 3,000 limits the practical benefit to modest gains.

3. Holdover Relief: Deferral, Not Elimination

Holdover relief under TCGA 1992 ss.165 and 260 is frequently deployed in estate planning, but its characterisation as "relief" can obscure the fundamental reality: it is a deferral mechanism. The gain is not extinguished; it is transferred to the donee by reducing their base cost by the held-over amount. This distinction has significant consequences for the interaction with IHT.

3.1 Section 165: Relief for Gifts of Business Assets

Section 165 provides holdover relief for gifts of business assets, including interests in trading companies where the donor holds at least 5% of voting rights, and assets used in the donor's trade.15 The relief operates by joint election between donor and donee (form HS295), with the donor's gain held over and the donee's base cost reduced accordingly.16

A critical limitation: s.165 cannot apply where s.260 relief is available (s.165(3)(d)).1517 Where a gift of business assets constitutes an immediately chargeable transfer for IHT purposes -- for example, a transfer into a relevant property trust -- s.260 takes precedence. Only where the gift is a PET, or falls outside the IHT charge entirely, does s.165 operate.

3.2 Section 260: Relief for Gifts Subject to IHT

Section 260 provides holdover relief where the transfer is, or would be, a chargeable transfer for IHT purposes.1718 The scope extends beyond cases where IHT is actually paid: chargeability is sufficient, even if the nil-rate band, BPR, or APR eliminates the IHT liability.18 Gifts into relevant property trusts and immediately chargeable lifetime transfers therefore qualify for s.260 relief regardless of the IHT outcome.

The exclusion of PETs from s.260 is the provision's most consequential limitation. A PET is not immediately chargeable; it becomes chargeable only retrospectively if the donor dies within seven years. At the point of the gift, the chargeability condition is not met, and s.260 relief is unavailable -- even if the PET subsequently becomes chargeable.18 This exclusion is the genesis of the double tax trap analysed in Section 4.

3.3 The IHT Deduction on Subsequent Disposal

Where holdover relief has been claimed and IHT was charged on the same transfer, HMRC guidance at CG10280 confirms that the IHT attributable to the asset can be deducted when computing the gain on the donee's subsequent disposal.19 This prevents genuine double taxation on the same economic value. The deduction is available where either s.165 or s.260 relief was claimed or could have been claimed.19

3.4 Strategic Considerations

The interaction between holdover relief and the base cost uplift creates a strategic decision point. Where a donor gifts business assets with holdover relief and subsequently dies, the base cost uplift under s.62 applies to the donor's remaining estate but does not wash away the held-over gain in the donee's hands. Had the donor retained the asset until death, the full uplift would have applied, eliminating the gain entirely. Practitioners must weigh the IHT benefit of lifetime gifting (reducing the taxable estate) against the CGT cost of forgoing the base cost uplift.

4. The Double Tax Trap: Quantified

The most acute manifestation of the CGT-IHT interaction arises when a donor makes a lifetime gift of an appreciated asset as a PET and then dies within seven years. The resulting exposure -- the "double tax trap" -- demonstrates why integrated analysis is essential.

4.1 The Mechanism

The trap operates in three stages. First, the donor disposes of an appreciated asset. Because the gift is a PET, s.260 holdover relief is unavailable.18 If the asset is not a qualifying business asset, s.165 is also unavailable. The donor is liable to CGT on the full gain.13

Second, the donor dies within seven years. The PET becomes retrospectively chargeable under IHTA 1984 s.3A, and the full value transferred enters the cumulative IHT calculation.20 Third, the CGT already paid is not creditable against the retrospective IHT liability. No statutory mechanism permits set-off of CGT against IHT on a failed PET.13

4.2 Worked Example

Consider the following scenario. A higher rate taxpayer gifts a non-business investment property valued at GBP 500,000, with an original base cost of GBP 200,000, and dies four years later.

Lifetime gift (CGT):

  • Chargeable gain: GBP 500,000 minus GBP 200,000 = GBP 300,000
  • Less annual exempt amount: GBP 3,000
  • Taxable gain: GBP 297,000
  • CGT at 24%: GBP 71,2801

Death within seven years (IHT):

  • Value transferred: GBP 500,000 (assuming NRB already utilised by earlier transfers)
  • IHT at 40% on GBP 500,000: GBP 200,000
  • Taper relief (death in years 3-4 under IHTA 1984 s.7(4)): 20% reduction in tax
  • IHT payable after taper: GBP 160,00020

Total tax cost: GBP 231,280

Alternative -- retention until death:

  • IHT at 40% on GBP 500,000: GBP 200,000 (assuming NRB already utilised)
  • CGT: nil (base cost uplifted to GBP 500,000 under s.62)10
  • Total tax cost: GBP 200,000

The lifetime gift produces a combined liability GBP 31,280 higher than retention, despite taper relief reducing the tax charge by 20%. Without taper relief (death within three years), the differential widens: IHT at GBP 200,000 plus CGT at GBP 71,280 yields GBP 271,280 -- GBP 71,280 more than retention. Taper relief operates only on the tax payable, not on the value transferred; where the NRB covers part of the PET, the taper reduction applies solely to tax arising on the excess above the available nil-rate band.

4.3 Mitigation Strategies

Practitioners advising on lifetime gifts should consider several mitigating factors. First, where the asset qualifies for holdover relief under s.165 or s.260, the immediate CGT liability is deferred, and the IHT deduction under CG10280 prevents full double taxation on subsequent disposal.19 Second, term life insurance covering the potential IHT liability for the seven-year PET period transfers the financial risk, though premium costs reduce the net benefit. Third, structuring transfers to utilise available nil-rate band capacity and annual exemptions reduces the potential IHT charge on death.

The fundamental principle is clear: lifetime gifts of highly appreciated assets constituting PETs carry an inherent risk of combined CGT and IHT exposure that cannot be fully mitigated. The decision must be taken with full awareness of both tax consequences, not merely the IHT position.

5. Deeds of Variation: The Dual-Tax Planning Opportunity

Deeds of variation offer a distinctive post-death planning opportunity operating across both CGT and IHT simultaneously. The legislative provisions are parallel but independent, creating flexibility that is frequently underutilised.

5.1 The Legislative Framework

Under TCGA 1992 s.62(6), a variation made within two years of death is treated for CGT purposes as if effected by the deceased.1021 The variation is not a disposal by the original beneficiary; the redirected assets are treated as acquired by the new beneficiary at market value at death. The parallel IHT provision in IHTA 1984 s.142 provides equivalent treatment, provided the variation is executed within two years, contains the requisite statement of intent, and involves no consideration from outside the estate.22

The CGT election under s.62(6) and the IHT election under s.142 are independent.21 A beneficiary may elect for one without the other, creating scope for selective application where CGT and IHT outcomes diverge.

5.2 CGT Planning Applications

The CGT utility of deeds of variation extends beyond asset redirection. Where the deceased held assets with substantially different base costs, a variation can optimise the distribution of base cost uplift. Consider an estate with two assets: Asset A, acquired for GBP 50,000 and valued at death at GBP 300,000, and Asset B, acquired for GBP 280,000 and valued at death at GBP 300,000. Both receive the same uplift to GBP 300,000 under s.62. If the original will directs Asset A to a beneficiary intending to retain long-term and Asset B to one intending to sell immediately, reversing the allocation deploys the uplift more efficiently -- directing the asset with the larger eliminated pre-death gain to the selling beneficiary.

A variation redirecting assets into a relevant property trust creates an additional dimension: the transfer, treated as made by the deceased, may qualify for s.260 holdover relief on any subsequent deemed disposal.17 Where trust property subsequently becomes absolutely entitled to a beneficiary, TCGA 1992 s.71(1) deems a disposal by the trustees at market value, and any resulting losses may pass to the beneficiary under s.71(2)(a).10

5.3 The Independent Election

The ability to elect for IHT treatment under s.142 without the CGT election under s.62(6), or vice versa, is a powerful but underutilised tool. A variation redirecting assets to a charity may be elected for IHT purposes (reducing the estate's liability and potentially qualifying for the 36% reduced rate) without electing for CGT purposes, preserving the original base cost allocation where that produces a better outcome. Practitioners should model both elections before determining which to invoke.

6. The New BADR and APR/BPR Calculus

The phased increase in BADR rates and the introduction of the GBP 2.5 million APR/BPR allowance from April 2026 create a new comparative framework for business owners considering lifetime disposal versus retention until death.

6.1 BADR Rate Convergence

BADR rates are rising from 10% (pre-30 October 2024) to 14% from 6 April 2025 and 18% from 6 April 2026, subject to a GBP 1 million lifetime limit on qualifying gains.1323 Each spouse or civil partner has an independent GBP 1 million lifetime limit, and the two-year qualifying ownership period and 5% shareholding requirements continue to apply.23 From April 2026, the BADR rate of 18% equals the basic CGT rate, effectively eliminating the preferential treatment that historically incentivised lifetime business disposals. Investors' Relief follows the same rate trajectory (14% from April 2025, 18% from April 2026) with a GBP 1 million lifetime limit (reduced from GBP 10 million for disposals from 30 October 2024), relevant for qualifying shareholdings in unlisted trading companies.3

6.2 The Retention Versus Disposal Decision

For business assets within the GBP 2.5 million combined APR/BPR allowance, the analysis is straightforward: retention until death produces 100% IHT relief plus a full CGT base cost uplift, yielding a combined tax cost of zero.713 No lifetime disposal strategy improves upon this outcome.

For business assets exceeding the GBP 2.5 million threshold, the calculus shifts materially. The excess attracts 50% BPR, producing an effective IHT rate of 20%. A lifetime disposal under BADR at 18% (from April 2026) appears marginally preferable, but the comparison must account for the base cost uplift forfeited on lifetime disposal.

6.3 Worked Example: Business Owner with GBP 4 Million Qualifying Assets

Scenario: A sole business owner holds qualifying BPR assets valued at GBP 4 million, comprising: (a) the trading company, valued at GBP 2.5 million, with a base cost of GBP 1.5 million; and (b) founder shares in a subsidiary, with a subscriber-price base cost of GBP 1, valued at GBP 1.5 million. The GBP 1 million BADR lifetime limit has not been utilised. The owner is aged 60 and in good health.

Option A -- Retention until death:

  • BPR on first GBP 2.5 million: 100% relief = nil IHT7
  • BPR on excess GBP 1.5 million: 50% relief = GBP 750,000 subject to IHT
  • IHT at 40% on GBP 750,000: GBP 300,000 (assuming NRB utilised)
  • CGT: nil (base cost uplifted to GBP 4 million under s.62)10
  • Total tax: GBP 300,000
  • Beneficiaries' aggregate base cost: GBP 4 million

Option B -- Lifetime disposal of founder shares (GBP 1.5 million) under BADR:

  • Chargeable gain: GBP 1,499,999 (GBP 1.5 million less GBP 1 base cost)
  • Less annual exempt amount: GBP 3,000
  • Taxable gain: GBP 1,496,999
  • BADR on first GBP 1 million of qualifying gains at 18%: GBP 180,00013
  • Remaining GBP 496,999 at 24%: GBP 119,280
  • CGT total: GBP 299,280
  • Remaining estate (GBP 2.5 million) qualifies for 100% BPR: nil IHT
  • Total tax: GBP 299,280
  • Proceeds available: GBP 1,200,720 (GBP 1.5 million less CGT)

The total tax is marginally lower under Option B (GBP 299,280 versus GBP 300,000). However, Option A preserves GBP 4 million of base cost for beneficiaries, while Option B crystallises GBP 299,280 in CGT. The net advantage of Option B depends on life expectancy, future asset appreciation (increasing IHT exposure above GBP 2.5 million), and the utility of accessing disposal proceeds during the owner's lifetime. The GBP 1 million BADR limit applies to qualifying gains, not disposal proceeds; gains exceeding this limit are taxed at 24% for higher rate taxpayers.

6.4 AIM Shares: A Distinct Position

AIM-listed shares qualify for BPR but are excluded from the GBP 2.5 million allowance and receive only 50% relief, producing an effective IHT rate of 20%.7 The CGT rate on disposal is 24% for higher rate taxpayers (AIM shares do not qualify for BADR unless the shareholding meets the 5% requirement, which is unusual for portfolio holdings). Retention until death therefore remains preferable for most AIM portfolios: the effective IHT rate of 20% is lower than 24% CGT, and the base cost uplift eliminates future CGT liability for beneficiaries.

7. Spouse Transfers and the Separation Window

Inter-spouse and civil partner transfers constitute the most tax-efficient asset reallocation mechanism in the UK tax system, combining CGT neutrality with IHT exemption.

7.1 The No Gain/No Loss Rule

Under TCGA 1992 s.58, transfers between spouses or civil partners living together are treated on a no gain/no loss basis: the transferee acquires the asset at the transferor's original base cost.24 The gain is deferred, not eliminated -- it crystallises on subsequent disposal to a third party. The parallel IHT treatment under IHTA 1984 s.18 provides an unlimited exemption for inter-spouse transfers.14

This combination makes inter-spouse transfers the primary mechanism for reallocating assets to optimise individual allowances and rate bands. Each spouse has an independent CGT annual exempt amount of GBP 3,000, an independent BADR lifetime limit of GBP 1 million, and an independent IHT nil-rate band of GBP 325,000.4235 Transferring assets between spouses to utilise both sets of allowances is a foundational planning step.

7.2 The Post-April 2023 Separation Rules

The Finance (No. 2) Act 2023 introduced a three-year window following separation during which no gain/no loss treatment continues for inter-spouse asset transfers (s.58(1C)).2526 Previously, the rule ceased at the end of the tax year of separation. The extended window provides substantially greater flexibility for asset division for divorce or dissolution.

Where transfers are pursuant to a formal separation agreement or court order, no gain/no loss treatment applies without time limit.25 After the three-year window expires absent a court order, the connected persons rules apply: transfers are deemed at market value, with the transferor liable to CGT on any resulting gain.26 Practitioners advising separating couples should ensure transfers are completed within the three-year window or formalised through a court order to preserve CGT neutrality.

8. Pension Death Benefits and the CGT Reallocation Calculus

The inclusion of unused pension funds and most pension death benefits in the IHT estate from 6 April 2027 introduces a structural shift with CGT implications beyond the pension wrapper itself.8

Prior to this change, pensions occupied a privileged position: IHT-exempt, accessible as income by beneficiaries (subject to income tax if death occurred after age 75), and outside the CGT regime entirely. The rational planning response was to maximise pension retention and draw on non-pension assets first. From April 2027, the potential combined effective tax rate on pension death benefits -- up to approximately 67%, reflecting 40% IHT plus income tax at marginal rates on beneficiary drawdown from the remaining 60% -- fundamentally alters this calculus.9

For non-pension assets with high unrealised capital gains, the pre-April 2027 approach of retaining them in taxable wrappers (benefiting from the s.62 base cost uplift on death) now competes with crystallising pension income and reinvesting in BPR- or APR-qualifying assets.7 Pension drawdown generating income tax at marginal rates, reinvested in assets qualifying for 100% BPR within the GBP 2.5 million allowance, may produce a better combined tax position than pension retention with IHT at 40% plus income tax on beneficiary drawdown. The residence-based IHT regime, effective from 6 April 2025, adds a further variable for internationally mobile clients, whose IHT exposure now depends on the 10-of-20-years residence test rather than domicile status.6

Conclusion

The post-Finance Act 2025 environment demands that CGT and IHT be analysed as a single integrated capital tax system. The key decision criteria can be distilled into a structured framework.

For highly appreciated assets qualifying for full IHT relief within the GBP 2.5 million APR/BPR allowance, retention until death produces the optimal combined outcome: zero IHT and a complete CGT base cost uplift. For business assets exceeding the GBP 2.5 million threshold, the comparison between BADR at 18% and effective IHT at 20% creates a genuine planning decision dependent on asset values, life expectancy, and future appreciation expectations. For lifetime gifts of non-business appreciated assets, the double tax trap on failed PETs makes integrated CGT-IHT modelling essential before any transfer.

Deeds of variation provide underutilised post-death flexibility through independent CGT and IHT elections. Spouse transfers remain the most efficient reallocation mechanism, with the post-April 2023 three-year separation window providing enhanced planning scope. The April 2027 pension IHT inclusion will necessitate a wholesale review of asset allocation strategies, particularly the interaction between pension drawdown and non-pension CGT planning.

Practitioners have a professional obligation to present clients with integrated analysis. Advising on CGT without modelling IHT consequences, or recommending estate planning without quantifying CGT implications, falls short of the standard of care that clients are entitled to expect. Annual reviews incorporating both taxes, with explicit documentation of assumptions and trade-offs, represent the minimum standard of diligent practice.

CPD Declaration

Estimated Reading Time: 20 minutes Technical Level: Advanced Practice Areas: Capital Gains Tax, Inheritance Tax, Estate Planning, Private Client Advisory

Learning Objectives

Upon completing this article, practitioners will be able to:

  1. Distinguish the conditions under which holdover relief under TCGA 1992 s.165 and s.260 is available and explain their priority rules and interaction with the IHT chargeability requirement.
  2. Calculate the combined CGT and IHT exposure on a failed potentially exempt transfer of an appreciated asset using current unified CGT rates and taper relief provisions.
  3. Evaluate whether lifetime disposal under Business Asset Disposal Relief or retention until death produces a better combined tax outcome for business assets exceeding the GBP 2.5 million APR/BPR allowance.
  4. Apply the independent CGT and IHT election provisions for deeds of variation under TCGA 1992 s.62(6) and IHTA 1984 s.142 to optimise post-death planning outcomes.

Competency Mapping

  • CIOT/ATT Professional Rules and Practice Standards: Technical competence in cross-tax analysis and integrated client advisory
  • ICAEW Code of Ethics: Professional competence and due care in advising on the interaction of direct taxes within estate planning

Reflective Questions

  1. How would you adapt your current client review process to ensure that CGT and IHT implications are assessed simultaneously rather than sequentially for estate planning recommendations?
  2. In what circumstances might you recommend a lifetime gift of an appreciated asset despite the double tax trap risk, and what documentation would you prepare to evidence the integrated analysis?
  3. How might the April 2027 pension IHT inclusion change the sequence in which you advise clients to draw on different asset categories during retirement?

Professional Disclaimer

The information presented reflects the regulatory and legislative position as of 2026-02-24. Regulations, tax rules, and professional guidance are subject to change. Readers should independently verify all information before acting and seek advice from appropriately qualified solicitors, financial advisors, or other professionals for their specific circumstances.

Neither WUHLD nor the author accepts liability for any actions taken or decisions made based on the content of this article. Professional readers are reminded of their own regulatory obligations and duty of care to their clients.

Footnotes

Footnotes

  1. GOV.UK: Capital Gains Tax -- rates of tax. https://www.gov.uk/government/publications/changes-to-the-rates-of-capital-gains-tax/capital-gains-tax-rates-of-tax ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7

  2. HMRC Capital Gains Manual CG10245 -- Capital Gains Tax: rates of tax from 30 October 2024. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg10245 ↩

  3. Finance Act 2025 Part 1 -- Capital gains tax rates and reliefs (enacted). https://www.legislation.gov.uk/ukpga/2025/8/part/1/crossheading/capital-gains-tax-rates-and-reliefs/enacted ↩ ↩2 ↩3 ↩4

  4. GOV.UK: Capital Gains Tax -- Annual Exempt Amount. https://www.gov.uk/government/publications/reducing-the-annual-exempt-amount-for-capital-gains-tax/capital-gains-tax-annual-exempt-amount ↩ ↩2 ↩3

  5. GOV.UK: Inheritance Tax nil-rate band, residence nil-rate band from 6 April 2028. https://www.gov.uk/government/publications/inheritance-tax-nil-rate-band-and-residence-nil-rate-bands-from-6-april-2028/inheritance-tax-nil-rate-band-residence-nil-rate-band-from-6-april-2028 ↩ ↩2

  6. Finance Act 2025, Part 2, Chapter 4 -- Inheritance tax (long-term UK residence). https://www.legislation.gov.uk/ukpga/2025/8/part/2/chapter/4 ↩ ↩2

  7. GOV.UK: Agricultural property relief and business property relief changes. https://www.gov.uk/government/publications/changes-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-changes ↩ ↩2 ↩3 ↩4 ↩5 ↩6

  8. GOV.UK: Inheritance Tax -- unused pension funds and death benefits. https://www.gov.uk/government/publications/inheritance-tax-unused-pension-funds-and-death-benefits/inheritance-tax-unused-pension-funds-and-death-benefits ↩ ↩2

  9. Mayer Brown: Inheritance Tax on Pension Death Benefits -- Revised Proposals. https://www.mayerbrown.com/en/insights/publications/2025/07/inheritance-tax-on-pension-death-benefits-revised-proposals ↩ ↩2

  10. Taxation of Chargeable Gains Act 1992, Section 62 (enacted). https://www.legislation.gov.uk/ukpga/1992/12/section/62 ↩ ↩2 ↩3 ↩4 ↩5 ↩6

  11. HMRC Shares and Assets Valuation Manual SVM107140 -- Death and CG. https://www.gov.uk/hmrc-internal-manuals/shares-and-assets-valuation-manual/svm107140 ↩

  12. HMRC Capital Gains Manual CG32210 -- Valuation of assets at date of death. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg32210 ↩

  13. Kingsley Napley: IHT and CGT -- Uncomfortable Bedfellows. https://www.kingsleynapley.co.uk/insights/blogs/private-client-law-blog/iht-and-cgt-uncomfortable-bedfellows-dont-overlook-possible-capital-gains-tax-exposure-in-your-inheritance-tax-planning ↩ ↩2 ↩3 ↩4

  14. Inheritance Tax Act 1984, Section 18 -- Transfers between spouses or civil partners. https://www.legislation.gov.uk/ukpga/1984/51/section/18 ↩ ↩2

  15. HMRC Capital Gains Manual CG66880 -- Relief for Gifts of Business Assets: Introduction. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg66880 ↩ ↩2

  16. HMRC HS295 -- Claim for hold-over relief under sections 165 and 260 TCGA 1992. https://assets.publishing.service.gov.uk/media/67cae293a4dacdc2b08d80d8/HS295_claim_form.pdf ↩

  17. HMRC Capital Gains Manual CG67030 -- Relief for Gifts Subject to Inheritance Tax: Introduction. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg67030 ↩ ↩2 ↩3

  18. BDO: Capital Gains Holdover Relief -- How s165 and s260 work. https://www.bdo.co.uk/en-gb/insights/tax/tax-support-for-professionals/capital-gains-holdover-relief-how-s165-and-s260-work ↩ ↩2 ↩3 ↩4

  19. HMRC Capital Gains Manual CG10280 -- Capital Gains Tax: interaction with Inheritance Tax. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg10280 ↩ ↩2 ↩3

  20. Inheritance Tax Act 1984, Section 3A -- Potentially exempt transfers. https://www.legislation.gov.uk/ukpga/1984/51/section/3A ↩ ↩2

  21. HMRC Capital Gains Manual CG31650 -- Instruments of variation: conditions. https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg31650 ↩ ↩2

  22. Inheritance Tax Act 1984, Section 142. https://www.legislation.gov.uk/ukpga/1984/51/section/142 ↩

  23. GOV.UK: Business Asset Disposal Relief -- How to claim. https://www.gov.uk/business-asset-disposal-relief/how-to-claim ↩ ↩2 ↩3

  24. Taxation of Chargeable Gains Act 1992, Section 58. https://www.legislation.gov.uk/ukpga/1992/12/section/58 ↩

  25. GOV.UK: Capital Gains Tax -- separation and divorce. https://www.gov.uk/government/publications/capital-gains-tax-transfer-of-assets-between-spouses-and-civil-partners-in-the-process-of-separating/capital-gains-tax-separation-and-divorce ↩ ↩2

  26. Tax Adviser Magazine: Calculating capital gains tax on property in cases of separation or divorce. https://www.taxadvisermagazine.com/article/calculating-capital-gains-tax-property-cases-separation-or-divorce ↩ ↩2

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