Appropriation to Charity

Trusts Discussion
1

I act in an estate where the only asset is a house which, being in a prime position in a popular Cornish seaside town has attracted, now that it is on the market, a price substantially more than probate value. Creditors and non-charity legatees will have to be paid out of the sale proceeds with the balance going to charitable beneficiaries.

Contracts for the sale of the house have not yet been exchanged and one of the charities has written to me suggesting a partial appropriation of the house, in order to assist the charities over the question of CGT. Partial appropriation of a share portfolio I can understand but I have never come across before the suggestion of .partial appropriation of a single indivisible asset. Has anyone else, please?

David Lush
Cornish Venning Ltd

2

I believe that HMRC will not accept that a partial appropriation of land to (in this case) the charity is possible and effective for CGT purposes. In essence, their argument is that the charity does not become absolutely entitled to that share ( as a legatee).

Their supposed support for their view is Crowe v Appleby. A reading of the case does not prima facie seem to support their view.

Malcolm Finney