I have a matter when the husband has passed away leaving a NRBDT with residue to his wife. The assets in his sole name comprised of shares worth around £500K and £30K in premium bonds. The family home passed to the spouse by survivorship.
The family wish to appoint the available NRB out to the three children - they do not want to appoint to spouse and claim the TNRB on spouses death.
The problem is, they don’t want to transfer the shares in specie, nor do they want to sell the shares and realise the loss. They want to leave the estate in a period of administration until the shares recover and can be sold.
All you need do within the two years is appoint the trust to the children. There is no need to appropriate within the two years, but once appointed to trustees they will be under a duty to insist on assets being transferred to them if the estate has been administered. Therefore there will be a conflict of interest if the executors and trustees are the same people.
No one should plan there finances on the assumption shares may go up. Just now they are at risk of going down with Covid and brexit uncertainties
I see no overriding reason the shares cannot be appointed out to the children absolutely, but retained in the name of the executors.
However, if the shares are not transferred into the names of the beneficiaries (or their nominee), they may effectively be disenfranchised, which is an aspect that will need to be balanced against the reasons for them being left in the name of the deceased.
If the appointment is made before the shares are appropriated to the trustees, the beneficiaries should take the shares at probate value as “legatees” for CGT purposes (s.62(4) TCGA 1992).
In any event, unless varied by the terms of the will, the shares will need to be appropriated (whether to the trustees or directly to the children) at their value as at the date of appropriation (Re Charteris, 1917)
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals