Law relating to property CGT being apportioning to beneficiariesicieries

[roythegrass]

I’m an executor in a will. For probate the deceased property is valued at a figure upon which inheritance tax –after allowances- has been paid. The property will sell for a higher value and potentially CGT is payable on the difference/gain.
Prior to signing contracts I believe I can send a memorandum of appropriation to each beneficiary appropriating a share of the property corresponding to their percentage share of the estate residue such that they have to declare this gain, if any. (Most are non or standard rate tax payers and have no capital gain in the tax year)
The solicitor dealing with the estate is questioning this. I posted the question on communityforums@hmrc and their response was to send a link of no relevance to the question!
Can anyone send me a link to the law/rule relating to this option.
Many thanks

[someone]

Not sure there will be a 'law' for this. I think it's a basic application of CGT. If the asset is sold by the estate, then the estate pays CGT, if it's sold by the beneficiaries then they pay CGT. AIUI the 'loophole' is that a distribution to the beneficiaries is not a disposal for CGT.

But I only know as much about this as I've picked up reading this site so I might be barking up completely the wrong tree!

[AGoodman]

someone is absolutely right

this isn't uncommon - in fact it's standard practice where charities are residuary beneficiaries - so if the solicitor is querying it, they should be asked to check again - it should be covered by most probate textbooks/works.

Bear in mind that (I think) you need beneficiary consent to an appropriation under the statutory power. Many/most wills extend this so that consent isn't required.

You would normally do it by deed (particularly where a property) but I'm not 100% sure if that is necessary. It would certainly be wise.

[AK2021]

I am doing similar as suggested by the solicitor and others.

HMRC seem pretty relaxed about what constitutes a DofA

From IHTM222022
The Administration of Estates Act 1925/S41 gives trustees a power to appropriate assets in or towards satisfaction of any legacy or interest in the deceased’s assets. It does not have to be done by formal deed, as long as other evidence is produced to demonstrate that an appropriation (and more importantly its timing from a valuation point of view) has been made.

Contemporaneous records of oral statements, letters or the actions of all interested parties may all help to clarify the position. In practical terms, since many modern Wills authorise appropriation without the need for the legatees’ consent, an appropriation of an asset may well be in the form of documents evidencing an assent, conveyance, or transfer of legal title.