Capital Gains Tax

An estate contains a share portfolio and an ISA stocks and shares account operated by one fund manager. It is allowed for each beneficiary either to have their own account by dividing the holdings into their names within the company and for then them to sell them as and when or for the executors to sell up and have the proceeds paid direct to the beneficiaries. I am wondering which is most advantageous to the beneficiaries in terms of using their own allowances or is either way a deemed disposal for capital gains tax chargeable to the estate?
Claire Flood

Well if you start with the portfolio in the estate the executors could appropriate to the beneficiaries and then one could give directions for sale and the other to transfer to a new portfolio. The appropriation isn’t a disposal for CGT purposes. If the executors sell without an appropriation then it will be an executors’ sale and the estate will be liable for the CGT. If they sell after appropriation then they will be selling as bare trustees for the beneficiaries. If you want to get really complicated you could have a part sale in the estate first (to use the estates CGT annual exemption) and appropriate the rest and then sell as bare trustees. But it does require careful documenting.

Simon Leney
Cripps LLP