CGT in an estate

Happy Christmas to everyone

I wonder if members could comment on the below please .

I have an estate with two executors who are also the two beneficiaries.

There is a large potential liability to CGT on the investments . We have considered a DOV and let other family members take the gain. However the gain is possibly too large for this.

One other suggestion is that they could put all of the assets and cash via a Deed of Appropriation in to a bare Trust. The Trustees would then manage this themselves outside of the estate.

Can this be done. If it can they would have a Trusts CGT allowance and would have to keep selling over a number of years.

Many thanks


I don’t understand the proposal.

A bare trust is not a settlement for CGT and any capital gains made by the bare trustees is, for CGT purposes the capital gains. of the beneficiaries behind the bare trust. The bare. trustees have no CGT annual exempt entitlement.

Malcolm Finney

You do not say what the assets which are likely to give rise to chargeable gains comprise but if these consist of shares then I think you need to look at a deed of variation again. If the two beneficiaries are happy to increase the number of beneficiaries who are to share in those assets then surely if these are divided up between them, they can sell sufficient shares each tax year to keep within their CGT allowances. If properties are involved, these can be transferred in the same way and whilst it may be less flexible when it comes to selling a particular property so as to keep within the joint CGT allowances they would have, at least they would have between them a greater number of allowances than just the two.

Patrick Moroney

The simplest solution may be for the assets to be appropriated in equal shares to the two beneficiaries, and they can then sell over a number of years using their annual allowances. They may also be able to give assets to their spouses or civil partners if they have them, to increase the available allowances.
If they need to sell quickly then a DoV may be a way to increase the annual allowances available, but not if there is a pre-arrangement for the proceeds to be given back.

John Randel