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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Non-retrospective variations: assets vested in personal representatives

If the variation

  • is made at a time when the assets involved are vested in the personal representatives

and

  • the variation is not treated as being retrospective to the date of death

    • by reason of Section 2 of the Inheritance (Provisions for Family and Dependants) Act 1975

    or

    • by the application of TCGA92/S62 (6)

then the following instructions should be followed in deciding what the Capital Gains Tax consequences are

  • where assets that were due to pass to a trust no longer pass to that trust, see CG32080+
  • in all other cases see below and the rest of this section, CG31960 to CG32070.

Whilst the assets of the estate remain vested in the personal representatives, all that a legatee holds is a chose in action, being the right to have the estate correctly administered in due course. This chose in action is personal to the legatee and is not disposed of if the devolution of the estate is varied. The variation therefore only disposes of the future proceeds of this chose in action. The proceeds of an existing chose in action which will arise in the future are themselves a chose in action. At the date the variation is effected this second chose in action, which may be described as a future chose in action, is acquired by the assignee under the variation.