Practical application of Crowe v Appleby

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

Crowe v Appleby ― overview

This guidance note explains how the principle established in Crowe v Appleby applies in the real world, with examples, and illustrates the complications that can arise. Crowe v Appleby established that where trustees own an undivided share of land and a beneficiary becomes absolutely entitled to a share of it, a deemed disposal for CGT would not arise when a beneficiary becomes entitled to a share until the last beneficiary becomes entitled to their share. This could also apply to other indivisible assets.

Crowe v Appleby is an English case and applies to land in England and Wales. HMRC also accept that land owned in Scotland by English trustees will also be subject to the rule in Crowe v Appleby. Land in Northern Ireland is not subject to Crowe v Appleby however and neither are trusts subject to Scottish law.

Beneficiary becoming entitled to part of a fund

It is usual in some types of trusts such as 18–25 (s 71D) trusts or

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