One of the various roles of an Executor is to make sure that all estate debts are paid.
In particular, an Executor needs to make sure any tax liability of the deceased during their lifetime or of their estate is accounted for.
Keeping records of everything that might affect the calculation of your (or your estate’s) tax liability is crucial and will help make sure your beneficiaries receive the benefit of your estate by minimising any tax liability after your death.
In particular, accurate records will enable the correct amount of any CGT to be calculated and prevent having to pay more CGT than is necessary.
You should consult with your accountant as to the exact type of records needed to calculate any capital gain (or loss).
Typically, they can include documents to show:
• the nature of the transaction;
• when it took place; and
• how much you paid for an asset.
There can be significant time and cost (for example, obtaining valuations) spent in trying to reconstruct transactions that occurred years ago in order to determine the cost base of an asset.
The tax position can be complex but it is made far simpler with accurate records.