Crowe v Appleby: UK CGT deferral for indivisible trust assets and IHT exit charges - hold-over relief pitfalls, non-residence risks, and planning for 18-25 trusts and life interests
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Practice notes
What does the rule say?
The principle in Crowe v Appleby applies when a trust holds an indivisible interest in land (or another asset) and the beneficiaries become absolutely entitled at different points in time. For capital gains tax (CGT), no deemed disposal happens until the final beneficiary becomes absolutely entitled to their portion. However, Crowe v Appleby is limited to CGT, so for inheritance tax (IHT) there is an exit from the trust and an exit charge must be calculated. See Practice Note: Relevant property trusts—the exit charge. For income tax, once a beneficiary satisfies the contingency and attains absolute entitlement, income arising from their share of the property is chargeable on that beneficiary rather than the trustees. The rule only operates where a contingency is fulfilled, and not simply where assets are appointed to a beneficiary. This differs from the usual position, which would otherwise require the trustees to make a deemed CGT disposal as each beneficiary reached the contingent age.
Practical Issues
Where the first beneficiary becomes absolutely entitled to a share in an indivisible asset:
- an exit charge arises at...
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Web page updated on 21/05/2026
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