CGT & Non Overreaching of Trusts on Sale-Non retro variation by Tomlin Order for valuable consid-who pays the CGT & when? Beneficiary’s rights to proceeds & continued residence following sale by sole PR burdened by two Trusts that were not overreached?

Hello all. I’m researching a case and looking for references in HMRC Manuals, case law etc.

It was a contested probate matter where the PR issued proceedings, the Defendant Defended and Counterclaimed, a Mediation was held and the parties compromised their Claim and Counterclaim resulting in a post Administration Period Non- retrospective Variation by means of a High Court Tomlin Order for Valuable Consideration which split the Estate 60/40.

The Grant of Probate was obtained a Month after the Court Tomlin Order last year and an Assent of the Deceased’s Beneficial Interests in the Family Home in the 60/40 split was made last year in October, 3 months after the Grant of Probate to the PR as Beneficiary 1 and the Defendant ( as Assignee of the Legatee PR ) as Beneficiary 2.

The House was sold last month.

Question 1 - Who pays CGT, at what rates, and when ?

I found a reference in HMRC CG31960 that suggests that the PR as Legatee Donor would have been liable to pay CGT on the value of the Gift to the Defendant as of the date of the Tomlin Order. I did find a more explicit reference in another HMRC Manual but have now lost that reference.

Non Overreaching Background

The PR sold the House in May 2023 as a single PR with Limited Title Guarantee which Guarantee was amended so it only applied to post death matters.

There is a 1977 Declaration of Trust protected by a Form A Restriction on the Land Register but with no TRS Registration and the 2022 Trust resulting from the Deed of Assent protected by a TRS Registration but no second Restriction on the Land Registry Register.

Beneficiary 1 and 2, the PR and the Defendant each have a 10 % Beneficial Interest stake in the 1977 Declaration of Trust. Beneficiary 1 has a 60 % Beneficial Interest stake and Beneficiary 2 has a 40% Beneficial Interest stake in the Deceased’s 80% Interest as a result of the 2022 Assent. The Deceased is still registered as Owner of the Legal Estate at Land Registry.

It would appear that the Trusts were not overreached and still bind the Legal Estate.

The Defendant ( Beneficiary 2 ) was in occupation of the Family Home on the dates of Exchange of Contract and Completion and returned home to find all his belongings thrown out of the House and the new purchasers in Residence. The PR had refused to engage and had not provided the dates for either.

Beneficiary 2 then found himself wrongfully arrested by the Police on false charges of Assault after he had barricaded himself in the garage, the PR ( Beneficiary 1 ) and the Buyers having colluded together to oust him from the Property on a false allegation so they could obtain vacant possession.

However, Beneficiary 2 Campervan is still on the Drive of the Family Home with all his possessions inside but he cannot currently return to the Family Home because his Bail Conditions are preventing his return and even from contacting the Buyers directly or indirectly.

The PR has been refusing to pay him any money from the sale for over 4 weeks, notwithstanding his two trusts and has issued a Torts ( Interference with Goods ) Act Notice to seize and sell his Campervan. The PR is claiming Beneficiary 2 has no right to claim anything off her because the Tomlin Order was in full and final settlement of all claims between them !

Beneficiary 2 is a retired ex Army war Veteran and is now currently homeless living in his car and needs some help.

Question 2 - What are Beneficiary 2 options with Authorities in support ?

I was just wondering if this post has gone live as I have not had any replies as yet ?

Yes Mark it has gone live. Not my area I’m afraid.

The post seems excessively long and detailed which may put some people off I suspect. Give it a few more days and if no answers try repostinga bit shorter maybe.

Malcolm Finney