Your World of Legal Intelligence
 United Kingdom | +44 (0) 20 7284 8080

Chapter CG32000

Document Cited authorities 1 Cited in Related
Vincent
Published date12 March 2016
Record NumberCG32000

A non-retrospective variation may be made purely voluntarily with no valuable consideration received. For example if

  • a deed of variation or disclaimer is voluntarily executed outside the period of 2 years from the date of death

or

  • if a deed of variation is voluntarily executed within the 2 year period but no valid election under TCGA92/S62(7) is made

or

  • the beneficiary gifts his or her interest in the estate to some other person

then there will be no valuable consideration.

An agreement to assign a future chose in action, see CG31940+, is only a good assignment when it is made for valuable consideration. When there is no valuable consideration the assignment can only take effect once there are specific assets that the legatee can assign. This position is only reached when assets vest from the estate to the legatee, normally when the residue is ascertained.

The result is that in such a case TCGA92/S28 does not operate to fix the date of disposal at the date of variation. Instead the disposal only occurs when assets actually vest in the legatee and are then transmitted on to the assignee. At that time the legatee is deemed to both acquire and immediately dispose of the assets to the assignee. The legatee’s acquisition cost at this time will be the market value at the date of death by reason of TCGA92/S62 (4). The disposal, not being a bargain at arm’s length, will take place at the market value of the chargeable assets passing to the assignee at that time. As for any other disposal made otherwise than by way of a bargain at arm’s length, if the disposal occurred before 14 March 1989 an election for gifts holdover relief under FA80/S79 can be made, see CG66450+.

If the variation is not made for valuable consideration then the non-retrospective deed of variation is not a good assignment of the future chose in action. Accordingly the assignee only acquires chargeable assets...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT