Q&As

Where an individual A leaves assets on trust for their civil partner B for life with remainder to charity and B then dies during the administration of A’s estate, how is the gain on the estate/trust assets which accrued between A’s and B’s deaths treated for CGT purposes? At what point will the assets from A’s unadministered estate vest in the charity remaindermen?

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Published on LexisPSL on 30/10/2019

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

  • Where an individual A leaves assets on trust for their civil partner B for life with remainder to charity and B then dies during the administration of A’s estate, how is the gain on the estate/trust assets which accrued between A’s and B’s deaths treated for CGT purposes? At what point will the assets from A’s unadministered estate vest in the charity remaindermen?

Where an individual A leaves assets on trust for their civil partner B for life with remainder to charity and B then dies during the administration of A’s estate, how is the gain on the estate/trust assets which accrued between A’s and B’s deaths treated for CGT purposes? At what point will the assets from A’s unadministered estate vest in the charity remaindermen?

The rules dealing with capital gains tax (CGT) on death provide that:

  1. assets the deceased was competent to dispose of are deemed acquired by the personal representatives (PRs), or any other person on whom they devolve, at their market value at the date of death but are deemed not to have been disposed of by the deceased so there is what is known as a CGT-free uplift on death

  2. if the PRs sell an asset during the administration period, they are liable for any CGT on any gains realised (compared to the date of death value) after deduction of any losses they incur on their disposal. The period of administration runs from the day after the date of death and ends when the estate is effectively wound up

  3. if a person acquires an asset as ‘legatee’, no chargeable gain accrues to the PRs and the legatee is treated as having acquired the asset at the same time and base cost as when

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