CGT - appropriation - linked estates

Hello all,

I hope someone can give me some pointers please.

W died first leaving all to H. W’s estate was partially administered when H died the following year. H’s executors have a CGT Annual Exempt Allowance for this tax year, but W’s estate no longer has a CGT AEA given the length of time since W’s death.

Can unsold assets from W’s estate be appropriated to H’s beneficiaries to use their own CGT allowance to mitigate CGT?

Many thanks.

Lucy Kealy
Clarkes LLP

W’s personal representatives should appropriate the assets to the estate of H.

The executors of H can then consider if they should appropriate any of those assets to the beneficiaries entitled to the estate of H.

If H’s executors do appropriate, they can instruct the personal representatives of W to transfer the assets to those beneficiaries.

Alternatively, once W’s personal representatives have appropriated to the estate of H, H’s executors could instruct them to sell the assets as bare trustee on behalf of H’s estate.

When making any appropriation, care should be taken to obtain any consents that may be required, particularly relevant if s.41 Administration of Estates Act 1925 has not been dis-applied, as a failure to do so may result in any disposals being assessable on the personal representatives of W.

Paul Saunders

I agree with Paul, but wonder why W’s estate is still unadministered and what the assets/liabilities are?

For example, if the only asset is a house, but the estate has outstanding debts [whether taxes, administration costs or otherwise] can the PRs validly appropriate the asset without any reciprocal acceptance of the debt being treated as extraneous?

Kevin Mullen