Is it possible for a residuary beneficiary to claim PPR relief on a property which is vested to him? It has been his PPR during the period of the Estate but not sold by PRs. HS282 states that assets acquired by a legatee following a death…are treated as though acquired at the date of death for MV at that date but S225 TCGA 1992 only talks about PRs or Trustees.
Thank you
Lucy Orrow
Lambert Chapman LLP
I think that the legislation is unclear (at least to me) as to whether the reading back to date of death under TCGA 1992 6.62 applies to ownership of an inherited property i.e. is the beneficiary deemed to have owned the property from the date of death under reading back or as seems to be the strict position the beneficiary has only owned the property from the date of assent for PPR purposes.
I have never had to argue the point with HMRC.
TCGA 1992 ss.225 and 225A apply respectively to trustees and PRs only.
Malcolm Finney
I am more bullish than Malcolm on this.
TCGA s62(4)(b) tells us that “the legatee shall be treated as if the personal representatives’ acquisition of the asset had been his acquisition of it”. I read this as meaning that the legatee is treated as having acquired the asset at the time of death, as well as at the date of death value (as the PR is deemed to have done under s62(1)(a).
Anthony Nixon
Irwin Mitchell Private Wealth
Anthony is correct as per HMRC manual:
Under TCGA92/S62 (4)(b) a legatee is deemed to acquire an inherited property on the date of death, see CG31140. The period of ownership begins on that date. In practice a legatee who wishes to use the property as a residence, but who was not already living there, may not be able to do so until a later date. In such cases the period from the date of death until the property begins to be used as a residence does not qualify for relief.
Malcolm Finney
so if they were living there before the death of the testator (father/adult son) then PPR should be available from death. This will have a significant impact as the value of the property has increased significantly from death to assent.
Many thanks
Lucy Orrow
Lambert Chapman