A colleague has encountered the following scenario:
Husband died intestate in 1979. His estate was not administered and the property in the estate remains in his name. Wife died in 2018, also intestate. We have calculated that the value of the property in 1979 was below the statutory legacy. As the property was never appropriated to the wife in satisfaction of the statutory legacy, the question is, what is in her estate?
We believe that, at the date of her death, wife’s entitlement was to the statutory legacy plus interest. The problem is that now, the value of the property has increased significantly and is now well above the statutory legacy. So, does that mean that retrospectively, wife was entitled to a life interest in half the value now in excess of the statutory legacy with the other half due to their children? If so, does this give her any interest in the property at the date of her death? What is the CGT position?
The widow is entitled to the statutory legacy and interest thereon to the date it is satisfied. Any assets appropriated in satisfaction of the legacy and interest will be valued for appropriation as at the date of appropriation - Re Charteris, 1917.
You therefore have to look at the current values, not historic values.
As at the date of her death, W would have been entitled to the statutory legacy, with interest to that date, together with an aggregable life interest in a half share of the remainder of the husband’s estate.
So far as CGT is concerned, as the assets of the husband have remained in his estate, unadministered, there is unlikely to have been any CGT uplift on W’s death.