asked the Chancellor of the Exchequer if failure to claim legal rights by a testator's children or grandchildren or surviving spouse is regarded as a capital transfer.
An election not to claim legal rights under Scots law would not be chargeable to capital transfer tax if the election was made within two years of the death—or within the extension of that period allowed by Section 47(5) of the Finance Act 1975—and otherwise satisfied the provisions of Section 47.
Where the provisions of Section 47 do not apply, an election not to claim legal rights or ultimate failure to do so would be a transfer of value and may be chargeable to capital transfer tax.
asked the Chancellor of the Exchequer, when capital transfer tax is payable on a testator's estate, if legal rights, being a debt on the estate, will be deductible before tax is assessed at all; and, if legal rights are a chargeable item, on what portion tax will be assessed, since under estate duty rules such claims were calculated after payment of duty.
pursuant to his reply [Official Report, 20th June 1975; Vol. 893, c. 556], gave the following information:Legal rights under Scots Law are not a liability that can be taken into account in determining the value of the estate transferred on death. Capital transfer tax is chargeable on the whole of that estate other than exempt items. These exempt items include the surviving spouse's legal rights.