Appropriation of deceased property &CGT

Trusts Discussion
1

Dear colleagues,

I would welcome some guidance on the above subject matter please.

The scenario is that I am looking to appropriate land to three children from mother’s estate which on disposal will have a net gain of circa £85K. It was my understanding that part appropriation of land was possible, so that each child could be given a 1/4 share and the final 1/4 share retained in the estate and sold by the Executors, thus utilizing up-to 4 CGT allowances. I know that this was possible when I worked for a Charity many moons ago and the beneficiaries were a mixture of exempt and non-exempt. However, I have read something which implies that this position may no longer be accepted by HMRC although I have not found anything definitive to substantiate this.

Any thoughts or experience with this would be much appreciated.

With many thanks

Shanti Palmer
SP Wills

2

I suspect you may be referring to a discussion as to the implications/applications of Crowe v Appleby [1975] as viewed by HMRC.

For my part, for what that’s worth, I believe you can do as you suggest. C v A was a case not about PR appropriations but trusts and absolute entitlements and I therefore cannot understand how HMRC may apply C v A to the scenario you outline. TCGA 1992 s 62(4) applies to dictate the base cost for CGT purposes of the appropriated shares.

Malcolm Finney