I would be grateful to hear from members any experience they have had of HMRC’s view on whether the residue of an estate is or is not ascertained simply because the NRBDT has never been constituted.
In our case the estate was less valuable than the NRB so there is no residue. The house has been left in the names of the deceased and the widow, and after payment of some other legacies, cash passed to the widow without any written records of trustee decisions.
Now we face the question (a) whether the deceased’s share in the house is held in the estate by the executor or whether it is held by the trustees and (b) whether PPR would be available given the lack of any explicit written records of the trustees exercising their power to permit the widow to occupy.
I have seen many similar questions on this forum in the past but it is difficult to come to a definitive view. Any help would be appreciated.
HMRC’s guidance on whether residue has been ascertained for CGT purposes is at CG30810.
In the case in question where, at the time of death, the estate is insufficient to satisfy prior legacies in full, until such time as the executors appropriate to satisfy those legacies I do not see how residue can have been “ascertained”.
Although, at the time of death the estate was insufficient to fund the prior legacies in full, if the value of the assets appreciate such that by the time an appropriation is made to satisfy the legacies there is a surplus then residue will have value and exist.
Accordingly, until such time as the estate is exhausted, or the prior legacies satisfied in full, I do not believe that residue can be “ascertained”.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals