FW: Income tax treatment of an appointment under s144 IHTA

Following on from my earlier posting, I wonder if an alternative interpretation is that the property continues to be treated as part of the residue for income tax purposes, and if for example, it is assented to A before any other distribution from the estate, it will be treated as including a share of the residuary income proportionate to the value of the property to the value of the rest of the residue.

Would this be the correct way to treat any deed of variation under which a particular asset forming part of residue is diverted to a new beneficiary by a deed of variation? There would be a certain logic, in that otherwise if a residuary beneficiary diverted all of the assets specifically in a deed of variation, leaving little in the way of cash, and not enough to cover the total residuary income, then hmrc would not get any higher rates of tax on that income.

Simon Northcott

It is a question of looking at the actual words used in the appointment.
Why should the appointment of a particular property carry the right to
income from the date of death if, by replacing the property with a cash
sum would not entitkt the recipient to the interest earned on that cash
sum during the same period.

If the executors intended the income since death to pass with the
property, it would have been simple to have included the appropriate

It seems to me that the net rents will form part if the residuary
income, and be assessable upon the residuary beneficiaries.

I believe that if the property and net rents from death had been gifted
by deed of variation then the rents would not be included within the
residuary beneficiaries’ income. However, within the context if the
estate in question, I appreciate that might not have been possible.

Paul Saunders