Deed of Appropriation

As part of the administration of an estate it is proposed that the deceased residence be appropriate in order to mitigate the potential CGT to be paid on the sale of the same. In order to maximize the annual allowances available it is intended that the beneficial interest in the property be appropriated as to 1/3 to beneficiary A, 1/3 to beneficiary B and with the estate retaining a 1/3 beneficial interest.
A share of each beneficiary’s interest to then be gifted to their respective spouses - thereby providing for 5 annual CGT allowances, and the added benefit of the spouses paying CGT at the rate of 18%.
My concern is that I have read a commentary which indicates that where the estate retains a beneficial interest in the property then the whole of the gain for CGT is treated as that of the estate and is taxable as such- resulting in only 1 annual allowance and a gain fully taxable at 28%.

Any guidance would be appreciated.

Stephen Petty
Bywaters Topham Phillips of Harrogate

Yes, I believe it is possible to use all 5 allowances. Appropriation to Beneficiaries and Appropriation of deceased property &CGT

Kind regards.

Ihsan Ali
I Will Solicitors Ltd

Dear Ishan

Thank you for your prompt response and thoughts

Kind regards