I am dealing with an estate where there was a £40K increase in the value of the property between date of death and date of sale. I had the Executor sign a document to declare that he was selling as bare trustee of the 6 residual beneficiaries, rather than as Executor, to (hopefully) take advantage of their own individual CGT annual allowances.
As the annual allowances cover the gain and, as a consequence there is no CGT payable, do I still need to advise the beneficiaries to report the gain to HMRC within the 30 days following sale?
It is worth noting that two of the beneficiaries reside abroad.
Any guidance would be greatly appreciated.
Harold Bell Infields & Co
The declaration seems to be intended to have the effect of an appropriation. Was the consent of the beneficiaries sought (or required) prior to the declaration?
Assuming that is not a problem, do you know for certain that the beneficiaries allowances are available to offset against their gains, so that no CGT arises?
I believe the non-resident beneficiaries are required to report the disposal within 30 days anyway, regardless of any tax liability.
Thank you for your posrt.
The consent of the other beneficiaires was not obatined (there wasd insufficient time to do so).
I am pretty sure that their own individual allowances are available, but I should check.
That is an interesting point regarding the non-resident beneficiairies and I will let them know.
Thank you for your thoughts on this.
I assume that the consent of the beneficiaries was not required, i.e. that the statutory power of appropriation was extended under the Will? If not, then I am not sure whether it will have been effective.
The rules regarding reporting CGT within 30 days, require there to be tax due.
If there isn’t a gain, or it’s covered by allowances or brought forward losses (arising before the sale), then no report within 30 days is required.
However, as mentioned by Diana, this exclusion is not in place for non-resident individuals.
Lucy Orrow CTA TEP
Lambert Chapman LLP