If the residue has not been ascertained, as regards that asset, the AP is still running and s62 applies to the PRs and trustees. If the asset is not required for administration, then the AP may have ended as regards that asset to bring s71 into play instead. Plainly the shorter the period between the death and the appointment of the asset to the DT trustees the smaller anyone’s gain will be.
CG30700P furnishes very useful information about HMRC’s attitude to this aspect. There are some points not covered and one I consider doubtful. In your case this is whether there can be an acquisition by the trustees “as legatee” within s64 TCGA 1992 without a written assent. You do not indicate the nature of an asset. An implied assent can occur (by “conduct” per HMRC) at least as regards pure personalty but an equitable interest requires writing and (if Re King’s Will Trust is correctly decided) so does land.
Until then the trustees have a different asset, the equitable right to due administration, but no right even equitable to the asset itself. HMRC say that where residue is in fact ascertained a bare trust arises over the not needed asset. They say that what matters here is the transfer of “beneficial ownership” and an assent is required only to transfer the legal title. First, beneficial ownership is not a CGT legal construct (but is for some Corporation Tax provisions and Tax Treaties). Secondly, HMRC seem to be thinking of s60 but the transfer of an equitable interest in land, or an interest which is itself equitable, must be in writing or it is a nullity and s60(2) is not engaged. HMRC are usually relaxed about when residue is in fact ascertained. TSEM7360: “You should normally accept that the administration ended on the date the personal representatives tell you it did”, but presumably not if a large amount of tax is at stake!
Only the discretionary trustees have power to “appoint” the asset to the beneficiary, not the PRs. One question is whether they can effectually do so before the PRs have vested the asset in them. If the PRS only do that after the exercise of the power of appointment, the equitable title will pass then and feed through to the beneficiary but, if it matters, there could be an issue about the exact timing of the CGT disposal under s71 by the trustees to the beneficiary. Logically that cannot precede their acquisition which is presumably why the share identification rules (which can apply to some other assets) exist to cover this.
I suspect that HMRC will be pragmatic about this and would accept that s62 applied and only then s71 on the later disposal by the trustees even if the disposal by the trustees takes place first. However, CG31900C deals specifically with non-retrospective variations of which, in effect, this is an example. They say, quite rightly, that an assignment (here the trustees’ appointment) is a non-event because not made for consideration and that if in the end the asset itself passes directly from the PRs to the assignee (here the beneficiary) the trust can be ignored and he acquires as legatee under s62. This is their view only where the asset has not vested before the assignment so that s62 has already operated (e.g. by the “bare trust” nonsense as explained above).
An omission from CG30700P is that the AP can come to an end as regards one or more assets but not others. It seems clear here that either the asset is the only asset or is comprised in residue but at any rate is not needed for administration. If less than 2 years have passed between the date of death and the trustees’ appointment, s62(6) could apply but s62(7), the required statement, may be a problem:CG38150 and 31669. The AP is irrelevant: s62(9). Given what they say about a gratuitous assignment you could argue that it was a nullity and make another appointment including the statement if still within 2 years.