In an estate matter, a parcel of land has sold at auction for £100,000 more than the probate value. The contract for sale was signed by the Executors however the completion date is not for approximately 3 weeks. Is it possible for the Executors to appropriate the land to the beneficiaries after exchange of contracts to make use of 8 CGT allowances which would result in no CGT liability, as opposed to the sale by the Executors giving only 1 allowance and resulting in a tax liability? If this is possible, do the Beneficiaries need to consent to the appropriation in advance?
Such an arrangement was approved by the House of Lords in Jerome v. Kelly (Jerome v HM Inspector of Taxes [2004] UKHL 25 (13 May 2004)).
I believe that is still good law.
The need, or otherwise, of the beneficiaries to consent will depend on whether not s.41 Administration of Estates Act 1925 has been dis-applied.
Paul Saunders FCIB TEP
Independent Trust Consultant
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