Rule
If there is a complete financial period ending before the date of death then the deceased’s share of the relevant profits must be declared on the deceased’s personal tax return for the period 1 January to the date of death.
If there is not a complete financial period ending before the date of death then the deceased’s share of the relevant profits to the date of death must be declared on an estate tax return and will be taxed on the executors and administrators and will be a debt due and payable out of the deceased’s estate.
The remaining relevant profits for the period from the date of death to the financial period end must also be declared on an estate tax return and will also be taxed on the executors and administrators and will also be a debt due and payable out of the deceased’s estate. However, the quantum of the assessment shall not include any share of the relevant profits attributable to a non resident beneficiary.
When the ownership of the ordinary share capital has been transferred to the individual beneficiaries so that they are now the registered shareholders, the Jersey resident individual beneficiaries will then be personally taxed on any subsequent attributed relevant profits.
Investment company shareholder death: Example 1
1 Investments Limited
| Financial year ended 31 December 2009 |
|---|
| Relevant profit for the financial year | £12,000 |
| Preference dividend | £0 |
| Dividend paid | £0 |
Synopsis:
- Mr A owned 12 shares, being 100% of the issued ordinary share capital
- Mr A died on 31 March 2009
- Two Jersey beneficiaries share in the estate equally: Mr B and Mr C
- The shares are transferred to Mr B and Mr C so that they are now the registered shareholders on 1 January 2010
Relevant profit per ordinary share year ended 31 December 2009
This is calculated by dividing the relevant profit by the number of shares
Relevant profit divided by number of ordinary shares |
|---|
| £12,000/12 shares | £1,000 |
Share of attributed profit applicable to Mr A deceased
This is calculated by multiplying the number of days by the number of shares.
(Number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period |
|---|
| (90 days x 12 shares £1,000) /365 days | £2,959 |
Executor declares £2,959 on an estate tax return.
Share of attributed profit applicable to each Jersey resident beneficiary
- Mr B is deemed to own 6 shares
- Mr C is deemed to own 6 shares
| Mr B |
|---|
| Period 1 April 2009 to 31 December 2009 = 275 days | (275 days x 6 shares x £1,000) /365 days | £4,520 |
| Mr C |
|---|
| Period 1 April 2009 to 31 December 2009 = 275 days | (275 days x 6 shares x £1,000) /365 days | £4,521 |
| Profit share |
|---|
| Mr B share | £4,520 |
| Mr C share | £4,521 |
| Total | £9,041 |
Executor declares £9,041 on an estate tax return.
Investment company shareholder death: Example 2
2 Investments Limited
| Financial year ended 31 March 2009 |
|---|
| Relevant profit for the financial year | £10,000 |
Financial year ended 31 March 2010
Relevant profit for the financial year | £12,000 |
| Preference dividend | £0 |
| Dividend paid | £0 |
Synopsis:
- Mr A owned 12 shares, being 100% of the issued ordinary share capital
- Mr A died on 30 September 2009
- Two beneficiaries share in the estate equally; Mr B and Mr C
- The shares are transferred to Mr B and Mr C so that they are the registered shareholders on 31 March 2010
Share of attributed profit applicable to Mr A deceased
Executor declares attributed profit of £10,000 on Mr A's 2009 tax return to date of death
Relevant profit per ordinary share year ended 31 March 2010
This is calculated by dividing the profit by the number of shares
Relevant profit divided by number of ordinary shares |
|---|
| £12,000 /12 shares | £1,000 |
Share of attributed profit applicable to Mr A deceased
The calculation is:
(Number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period |
|---|
| (182 days x 12 shares x £1,000) /365 days | £5,984 |
Executor declares £5,984 on an estate tax return.
Share of attributed profit applicable to each Jersey resident beneficiary
- Mr B is deemed to own 6 shares
- Mr C is deemed to own 6 shares
| Mr B |
|---|
| Period 1 October 2009 to 31 March 2009 = 183 days | (183 days x 6 shares x £1,000) /365 days | £3,008 |
| Mr C |
|---|
| Period 1 October 2009 to 31 March 2009 = 183 days | (183 days x 6 shares x £1,000) /365 days | £3,008 |
| Profit share |
|---|
| Mr B share | £3,008 |
| Mr C share | £3,008 |
| Total | £6,016 |
Executor declares £6,016 on an estate tax return.
Investment company shareholder death: Example 3
3 Investments Limited
| Financial year ended 31 December 2009 |
|---|
| Relevant profit for the financial year | £12,000 |
| Preference dividend | £0 |
| Dividend paid | £0 |
Synopsis:
- Mr A owned 12 shares, being 100% of the issued ordinary share capital
- Mr A died on 31 March 2009
- Three beneficiaries share in the estate equally
- Two Jersey resident beneficiaries, Mr B and Mr C
- One UK resident beneficiary, Mr D
- Four ordinary shares transferred to Mr B on 1 November 2009
Relevant profit per ordinary share year ended 31 December 2009
The relevant profit is divided by number of ordinary shares
Relevant profit divided by number of ordinary shares |
|---|
| £12,000 /12 shares | £1,000 |
Share of attributed profit applicable to Mr A deceased
(Number of days in which shares held x number of shares held x amount per share) divided by number of days in financial period |
|---|
| (90 days x 12 shares x £1,000) /365 days | £2,959 |
Executor declares £2,959 on an estate tax return.
Share of attributed profit applicable to each Jersey resident beneficiary
- Mr B is deemed to own 4 shares
- Mr C deemed to own 4 shares
| Mr B |
|---|
| Period 1 April 2009 to 31 October 2009 = 214 days | (214 days x 4 shares x £1,000) /365 days | £2,345 |
| Mr C |
|---|
| Period 1 April 2009 to 31 December 2009 = 275 days | (275 days x 4 shares x £1,000) /365 days | £3,014 |
| Profit share |
|---|
| Mr B share | £2,345 |
| Mr C share | £3,014 |
| Total | £5,359 |
Executor declares £5,359 on an estate tax return.
Mr B’s share of attributed profit when shares transferred to him
Four shares transferred to Mr B on 1 November 2009
| Profit on Mr B's shares |
|---|
| (61 days x 4 shares x £1,000) /365 days | £668 |
Mr B declares £668 on his personal 2009 tax return.
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