I have put below my original posting about CGT and DOVs. I am not sure how it ended up with the wrong heading-but thanks Diana for your response. Do any members have experience of hmrc accepting a substituted “seller” for CGT in these circumstances? It seems
to be stretching the tax fiction rather too far.
Simon, I am responding to your post under the same heading for continuity, but perhaps the heading should be changed as the subject matter does not appear to match.
I have always thought the same as you – that the original beneficiary would still be chargeable in relation to any sale pre-DOV. However, that does not seem to be reflected in the HMRC guidance, which states (at CG31630) as follows:
- If the assets have vested in the legatee and the legatee has disposed of the assets before the deed is executed, then the disposal is no longer treated as an occasion of charge for the legatee. Instead it is treated as an occasion of charge for the assignee.
It won’t, presumably, have any such effect if the sale is by the executors, however.
HMRC accept I believe that varying the devolution of an asset that has been sold can be achieved for IHT purposes, by gifting the proceeds in a deed of variation, and linking back the proceeds to the original asset in the deed.
However I do not believe this can result in a read back in relation to the sale for CGT purposes, by substituting the new beneficiary as the person making the CGT disposal. Do members agree? I thought there may have been a case confirming this, but cannot find