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HMRC internal manual

Capital Gains Manual

Death and Personal Representatives: Liability to the date: Assets of which the deceased was competent to dispose: Liability to date/death: deceased competent to dispose: introduction

TCGA92/S62 (10)

The legislation in TCGA92/S62 (1), see CG30320 and CG30730, applies to all assets `of which a deceased person was competent to dispose’. This latter phrase is defined in TCGA92/S62 (10). This says that the term includes all assets that

  • a person could have disposed of by his will assuming

 

  • the individual was of full age and capacity
  • the individual was domiciled in England

and

  • that all the assets were situated in England

and

  • the individual’s severable share of any asset in which the interest he or she held immediately before death was held as a beneficial joint tenant.

This latter category of asset cannot be disposed of by will because it passes automatically to the surviving joint tenant(s) on death, see CG30230.

 

Partnership interests

Many partnership agreements provide that on death the interest in the partnership assets automatically passes to the surviving partner(s). Interests in such assets therefore devolve on death in precisely the same way as interests in joint tenancies and cannot be disposed of in a will. However the definition has not been extended to include such assets. These interests should be dealt with according to the instructions on partnership assets, see CG27000+.

Assets excluded

The definition excludes assets where the deceased merely held a power of appointment which he or she could exercise in a will. It also excludes those assets where the deceased merely held the power provided by statute to dispose of an entailed interest.

Foreign law

The law applying to the devolution of assets depends

  • on where the deceased was domiciled and
  • on where the assets were situated.

For example, there are a number of countries where immovable property, such as land and buildings, cannot be gifted by the will of a person domiciled in that country. Instead the land must pass in accordance with statutory provisions.

But the definition, see CG30360, of assets of which the deceased is competent to dispose requires us to assume that the deceased was domiciled in England and that the assets were all located in England. On those assumptions the deceased could have dealt with such assets in his will. Therefore all assets devolving under foreign law will benefit from the provisions of TCGA92/S62 (1) deeming

  • there to be no disposal by the deceased, see CG30320

and

  • the acquisition by the personal representative or legatees to be at probate value, see CG30730.

Joint tenancies

An interest in an asset held on a joint tenancy in England cannot be transferred by will. It automatically passes on death to the surviving tenant(s). Despite this the definition includes such interests as being assets of which the deceased was competent to dispose. Therefore such interests benefit from the provisions of TCGA92/S62 (1) deeming

  • there to be no disposal by the deceased CG30320

and

  • the acquisition by the personal representatives or legatees to be at probate value, see CG30730.