Nature of legacy


(Simon James Northcott) #1

If a Will grants an option over a farm, and directs that a share of the proceeds are to go to A, and if the option is not exercised the farm is to be sold and 30% of the proceeds are to be paid to S, does that mean for
CGT purposes when the option is no exercised, 30% of the sale is by A, or is the whole sale an executor’s sale for CGT?

Simon Northcott


(Simon James Northcott) #2

I amend the question below as there were a couple of errors:

If
a Will grants an option over a farm to S, and directs that a share of the proceeds are to go to A, and if the option is not exercised the farm is to be sold and 30% of the proceeds are to be paid to A, does that mean for
CGT
purposes when the option is not exercised, 30% of the sale is by A, or is the whole sale an executor’s sale for CGT?

Simon Northcott


(Paul Saunders) #3

It seems to me that until, or unless, the executor appropriates any entitlement to A, the sale can only be made by the executor for CGT purposes and not, in part, by A.

Paul Saunders


(malcfinney1) #4

Once the time period within which the option must be exercised has past then presumably the executors can effect the sale (and hence any CGT charge is theirs) and distribute 30% of proceeds to A or 30% of the property may be appropriated to A for A to sell (and hence any CGT charge on the 30% would be that of A; A having acquired as legatee and at probate value).

Malcolm Finney