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HMRC internal manual

Capital Gains Manual

From:
HM Revenue & Customs
Published:
12 March 2016
Updated:
31 July 2026 - See all updates

CG31800 - Death and personal representatives: variation of the devolution of an estate: variations following proceedings in the courts

Introduction

Persons who are aggrieved by the terms of a will or intestacy may commence action in the Courts to get the devolution of the estate varied, see CG30280. If the aggrieved person is successful this will result in

  • the parties reaching a compromise settlement before a full hearing

or

  • the Court hearing the case and then making an order varying the devolution of the estate.

Where a compromise settlement is reached the Court will normally stay or dismiss the proceedings on terms scheduled to the order. Those scheduled terms will be the compromise terms agreed between the parties. The order of the Court in such cases is known as a `Tomlin Order'.


Inheritance (provision for Family and Dependants) Act 1975

Where proceedings are brought under the Inheritance (Provision for Family and Dependants) Act 1975 and after a full hearing the Court makes an order under Section 2 of that Act, the terms of that order are deemed to have applied from the date of death for all purposes (Section 19(1) Inheritance (Provision for Family and Dependants) Act 1975). There are therefore no Capital Gains Tax disposals on the making of the order and TCGA92/S62(4) will apply when assets vest in the persons named in the order. This will apply however long the interval from the date of death to the making of the Court order.

Where proceedings are brought under the 1975 Act but there is no full hearing of the case and it is settled by a Tomlin Order, see CG31800, the position will depend on the precise form of the order made by the judge.

In any case involving a minor or minors the judge will review the terms of the compromise agreement to ensure it is in the interest of the minor(s). The judge may

  • merely order that the parties are at liberty to carry out the terms of the compromise

or

  • add a requirement that the parties do carry out those terms.

If the order includes a positive requirement to carry out the terms of the compromise it should be accepted as being an order within Section 2 of the 1975 Act. It should then be dealt with as in CG31800 above. However if it does not include any such positive requirement it should not be regarded as being an order under that section. Instead it should be dealt with in accordance with CG31800.

If the case does not affect the interests of any minor then, normally, the order will not include any positive requirement. It should not be accepted as being an order within Section 2 of the 1975 Act.


Court proceedings

If

  • Court proceedings result in either a full Court order or a compromise order in `Tomlin' form varying the devolution of an estate

and

  • this is not regarded as an order under Section 2 of the Inheritance (Provision for Family and Dependants) Act 1975

then the order is considered to be a variation to which the provisions of Section 62(6) are capable of applying.

The treatment of the order will depend on how long has elapsed between the date of death and the making of the order.

  • If the order is made within 2 years of the date of death and an election under TCGA92/S62(7) is made within 6 months of the date of the order, the order should be treated as retrospective to the date of death. The terms of the deed supersede those of the will and there will be no occasion of charge for Capital Gains Tax purposes when the assets are transferred to the persons named in the deed.
  • If the order is made within 2 years of the date of death and no election under TCGA92/S62 (7) is made within 6 months of the date of the order but a late election is subsequently received the procedures in CG31600+, adapted for the fact that you are dealing with a Court Order rather than a deed of variation, should be followed.
  • If the order is made within 2 years of the date of death but no election under TCGA92/S62 (7) is made within 6 months of the date of the order and you are told no election will be made then the Court order will not be retrospective to the date of death. You should assume that the assets involved had not vested at the date of the order because of the Court proceedings. You should then proceed in accordance with CG31940+.
  • If the order is not made within 2 years of the date of death then it will not be retrospective to the date of death. You should assume that the assets involved had not vested at the date of the order because of the Court proceedings. You should then proceed in accordance with CG31940+.