CGT nad trusts

CGT nad trusts

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The beneficiary of a trust has received property following the death of the trustee. If he sells the property is CGT calculated as the gain between the selling price and the market value of the property at the time of death, or the value of the property when it was transferred into the trust. 

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By IanBrewster
08th Jun 2010 22:23

CGT and trusts

 The trust would have been responsible for any CGT while the property was held in trust.  The new owner will be responsible for any gain from the time it was transferred to them.

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By User deleted
09th Jun 2010 09:24

CGT and Trusts

Does this mean that the Trust has to pay CGT on a gain between the MV of the property entering the trust and the MV of the property at the time of death of the trustee? 

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By flurrymc
09th Jun 2010 09:54

death of trustee

The death of a trustee would not normally cause the winding up of a trust, so it depends why the trust is being wound up. 

Possibly the trustee was also the life tenant, in which case there is a death uplift under s73 TCGA'92, so there will be no CGT payable by the trust.

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By cathygrimmer
09th Jun 2010 12:40

More info

As flurrymc says, the death of a trustee doesn't terminate a trust so presumably the trustee was also the life tenant?  Generally an asset is transferred at current market value but assets can be passed at base cost if it is a revertor to settlor trust - and, in some cases, gains can be held over (if desirable). Trust tax is a complex area and I frequently sort out the problems caused by people dabbling in it without understanding it! If I were you, I would get more information on the circumstances from the trust accountants and their confirmation that your client has acquired the property with cost equal to market value on transfer.

This isn't a bare trust is it?

Cathy

[email protected]

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