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HMRC internal manual

Capital Gains Manual

Death and Personal Representatives: Distribution and vesting of assets: Personal representatives: ownership: when residue ascertained

For Capital Gains Tax purposes we are not concerned with the legal ownership of assets but only with the beneficial ownership. If these differ then the legal owners are merely nominees or bare trustees for the beneficial owners, see CG34300+.

The legal ownership of property may remain with the personal representatives for some considerable time after residue has been ascertained. For example, this may happen if there are complications in preparing a written assent for land, or where the personal representatives are simply dilatory in preparing an assent for any type of asset. However this does not prevent the beneficial ownership from passing to the legatees at an earlier date.

The beneficial ownership can pass when specific steps are taken to vest it in the legatees in advance of residue being ascertained, see CG30900. But this is fairly unusual. Normally vesting will happen when residue is ascertained and we can infer an assent to the vesting of the beneficial interest. Only occasionally will it happen at some later date where the period of administration has to be extended, see CG30920.

The leading case providing authority for this principle is CIR v Sir Aubrey Smith 15TC661. In that case Lord Hanworth MR said at the bottom of page 675, top of page 676

`The question is, in all cases: has the administration of the estate reached a point of ripeness at which you can infer an assent; at which you can infer that the residuary estate has been ascertained and that it is outstanding and not handed over merely for some other reason.’

The requirement that assents in respect of land must be in writing, see CG30900, should be regarded as applying only to the legal ownership of the land. Therefore the beneficial ownership of all assets should, except in the exceptional cases detailed in CG30710, be considered to have vested in the legatees once residue of the estate has been ascertained, see CG30780+.