General question. Brother and sister are beneficiaries of a will (and executors along with a professional executor). They want to assign the property to themselves but brother wants to then transfer his share into joint names of him and his wife so the eventual split is 50% sister, 25% brother, 25% brother’s wife (this is for CGT reasons).
Is the simplest way AS1 to brother and sister followed by TR1 to brother, sister and wife (on the basis that an extra LR fee is cheaper than a deed of variation) or is there another possible option such as noting the transfer to the wife on the AS1?
Unless the brother’s wife is non-UK domiciled for IHT purposes, I can’t see that a deed of variation would give any different tax benefits to a straightforward gift between the brother and her.
On the basic issue (and on the basis the wife is domiciled within the UK), I would favour a written resolution appropriating the property to the brother and sister (to include their active consent to the appropriation as beneficiaries if s.41 AEA 1925 applies), followed by a declaration of trust by the brother and sister giving effect to the brother’s intended gift to his wife. They could even be done the same day, provided that the appropriation happened first.
I think I’m right in saying that an AS1 can still be used in these circumstances.
This should provide a more “secure” audit trail should HMRC decide to investigate the matter. Perhaps might cost a little more but, as an “insurance policy”, it might prove worthwhile.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals