Separate settlements: appointments while estate in administration
A will may set up a discretionary trust and specify that the power of appointment is tobe exercised within two years of death. This is because IHTA84/S144 treats the exercise asif it had been provided for in the will. There are no special Capital Gains Tax rules forthis situation. This exercise is not a deed of variation, but a normal exercise of a powerof appointment. See CG31430 for the CGT treatment if the power is exercised beforeresidue has been ascertained or assent given. Otherwise the normal Capital Gains Tax rulesapply.
The IHT treatment is explained in IHTM35181+.