Q&As

At what stage and to whom can a Deed of Appropriation take place when selling a second property in an estate?

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Published on LexisPSL on 15/07/2016

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • At what stage and to whom can a Deed of Appropriation take place when selling a second property in an estate?

At what stage and to whom can a Deed of Appropriation take place when selling a second property in an estate?

We assume you refer to the situation when it is necessary to consider whether it is preferable for the personal representatives (PRs) to sell a property from the estate or whether it should first be appropriated to the beneficiaries to be sold by them. This may arise in any of the following situations:

  1. the beneficiary(ies) has/have part or all of their capital gains tax (CGT) annual exemption available

  2. the beneficiary(ies) will pay CGT at 18% on any part of a gain

  3. the beneficiary(ies) has/have losses available to offset against any gain

  4. the sale will make a loss and the PRs will not be making any further disposals that may produce gains to utilise the loss

Death is not usually an occasion of charge to CGT. The PRs are deemed to acquire the assets at market value at the date of death; in effect, all previous accrued gains are wiped out and the PRs start with a clean sheet. Under section 62(4)(b) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992), if the land is transferred to a beneficiary no chargeable gain accrues to the PRs and the beneficiary is treated as if the PRs' acquisition of the asset had been the beneficiary's acquisition of

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