CGT on Transfer to Residuary Beneficiaries

[SP11]

Hi

Just looking to understand the position with regard to a long running UK estate whose primary asset is UK land. DoD was 2009 and the estate has been running for this long because the beneficiaries haven't yet agreed how the land should be split. We are anticipating agreement on that split imminently now that the family have resolved their differences.

The land has grown in value substantially in the 15+ years since DoD.

If we were to transfer the land in the proportions agreed on, would this constitute a chargeable transfer or would the beneficiaries inherit DoD values as their base cost?

I can confirm they are residuary beneficiaries, not legatees receiving legacies, and there has been no Deed of Variation entered into (obviously we are well past the deadline for that anyways). My understanding is that both of these have a statutory read back to DoD values for CGT purposes however the position with residual beneficiaries seems a touch unclear, at least to me. I had wondered if CG30940 was relevant to set the date of assent.

Thanks.

[AGoodman]

s.62(4) TCGA should still apply to avoid any CGT on the distribution provided there was no intervening will trust. It should definitely be fine if the residuary beneficiaries were all absolutely entitled to their shares from the death.

It might possibly be inferred that the vesting actually took place earlier when the residuary estate was ascertained (as per CG30940) but that isn't clear here and wouldn't matter anyway. If vesting was already considered to have taken place then s.62(4) would have applied then and the transfer of the legal title now would be a nullity for CGT as the beneficial ownership isn't changing.

nb to avoid future confusion, the terminology for CGT is "disposal". the phrase "chargeable transfer" crops up in inheritance tax.

[SP11]

s.62(4) TCGA should still apply to avoid any CGT on the distribution provided there was no intervening will trust. It should definitely be fine if the residuary beneficiaries were all absolutely entitled to their shares from the death.

It might possibly be inferred that the vesting actually took place earlier when the residuary estate was ascertained (as per CG30940) but that isn't clear here and wouldn't matter anyway. If vesting was already considered to have taken place then s.62(4) would have applied then and the transfer of the legal title now would be a nullity for CGT as the beneficial ownership isn't changing.

nb to avoid future confusion, the terminology for CGT is "disposal". the phrase "chargeable transfer" crops up in inheritance tax.

Thank you very much and yes noted on chargeable transfer, I was aware of that but had not spotted that writing the query. I have historically been confused by the terminology in that the legislation refers to legatees but I now see their definition of legatee is very wide and will include residuary beneficiaries. And yes I think you're spot on with the relevant of when the residuary estate was ascertained, presumably only relevant for things like considering future PRR claims or similar (i.e. where the date of assent between PRs and residuary beneficiaries might be important).