Appropriation of Property

Trusts Discussion
1

I am dealing with an estate which has a number of beneficiaries; some of which are charities and some of which are non-charities.

The executors are selling the property but there is currently a bidding war so no agreed sale price. There will be a substantial increase in the probate value therefore, we are going to appropriate the property to the beneficiaries before selling.

The Will includes the STEP Provisions (1st edition). It is my understanding that we can appropriate without obtaining the consent of the beneficiaries. Can anyone confirm this is correct?

I understand that the value for the purposes of the appropriation shall be the value at the date of the appropriation and not the date of death value (as would have been the case if the 2nd edition STEP Provisions had applied. Can anyone confirm that is correct?

Finally, as the sale price is yet to be agreed, can anyone confirm whether we have to include the sale price in the Deed of Appropriation or whether we can appropriate by referring to the sale price set in the contract and in accordance with the shares set out in the Will rather than including specific figures.

Kerry Brookes
Lamb Brooks

2

Confirmed; Confirmed; and no price need be included-only the shares in which they take. Often useful to say the executors are authorised to sell on their behalf without referring back to them

Simon Northcott

3

As Simon says, there is no need to include within the resolution, or
other documentation effecting the appropriation, the value at which the
appropriation is made. This will be at current value (although if an
aliquot appropriation this is generally irrelevant).

Please note that the STEP 2nd provisions do not provide for assets to be
appropriated at the date of death value unless the specific additional
provision is incorporated, and then its application is pemissive and not
mandatory.

HMRC has given notice that it retains the option to treat an
appropriation at the date of death value to be a transfer of value
between beneficiaries if the difference in value justifies such action.

Paul Saunders