Q&As

What value is given to an estate asset on appropriation to a beneficiary and is the same value used for tax purposes? When may a higher value of land be substituted for the date of death value for IHT purposes?

read titleRead full title
Copyright © 2025 LexisNexis
Published by a LexisNexis Private Client expert
Published on: 21 January 2021
imgtext

Section 41 of the administration of Estates Act 1925 gives personal representatives (PRs) power to appropriate assets in or towards satisfaction of any legacy or other interest or share in the deceased's property, whether or not a person is absolutely entitled in possession at the date of appropriation. This enables PRs to allocate assets in the estate in their existing form without having to sell them and distribute the proceeds.

Where PRs appropriate assets, they should (unless the Will provides otherwise) revalue the assets as at the date of appropriation, as opposed to using the date of death value (Robinson v Collins) to determine the legatee's entitlement. If the length of time between the date of death and appropriation is short, the beneficiaries may agree that appropriation should be made at probate value. The Will may give the PRs power

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Appropriation definition
What does Appropriation mean?

Appropriation is a self-help enforcement remedy available to a secured party with security over financial collateral (ie cash, credit claims or financial instruments such as shares or other securities). It is available through the Financial Collateral Arrangements (No2) Regulations 2003, SI 2003/3226. It allows a secured party to take the financial collateral over which it has security as its own, or transfer it to a third party, as a means of enforcement without the need to take court action for foreclosure. It is common for security documentation over financial collateral to contain a clause granting a right of appropriation. The Loan Market Association's intercreditor agreement for leveraged acquisition finance transactions (the LMA intercreditor agreement) deals with the effects of appropriation on enforcement and the valuation of the financial collateral at appropriation. See clause 14 (Distressed Disposals and Appropriation) of the LMA intercreditor agreement.

Read more readmore

Popular documents

The basis of calculation of income tax

The basis of calculation of income taxThe calculation of income tax liabilities is usually done by a person's tax adviser (usually using a software package) or by HMRC following submission of a tax return, rather than by a tax lawyer, although lawyers who deal with trust administration will often

CGT—hold-over relief for trusts and individuals

CGT—hold-over relief for trusts and individualsWhere an asset is acquired or disposed of otherwise than at arm’s length (ie there is a gift or a transfer at an undervalue), this is a disposal for capital gains tax (CGT) purposes. The chargeable gain on this disposal is calculated on the basis that

CGT—PPR relief for trusts and estates

CGT—PPR relief for trusts and estatesThis Practice Note outlines the circumstances in which trustees of a settlement or the personal representatives (PRs) of a deceased person may claim principal private residence (PPR) relief from capital gains tax (CGT) in respect of property held in a settlement

Types of income for income tax purposes

Types of income for income tax purposesThe main types of income are:•employment income•pension income•social security income•trading income•property income•savings and investment income and•miscellaneous incomeHistorically, the application of income tax involved the identification of a source of