OK
I'm a generalist not a tax specialist. This is my query.....
X, a very wealthy man, knows that he is dying and sets up a trust in Jersey in which my client is listed as a beneficiary with shares in a private company valued at £22,000 in probate (X dies in 2004). The shares remain in trust and eventually in 2014 a third party takes over the company and my client receives a sum of £96,000.
Is the base cost of those shares for CGT purposes £22,000 or has the gain over the 10 years been accumulated within the trust and therefore of no concern to my client ?
Thanks people ..........
Related resources
Replies (2)
Please login or register to join the discussion.
Not enough information i
The question cannot be answered without (ideally) sight of the trust document and understanding the precise nature of your client's interest in the trust.
I suggest that you ask the trustees to let you have the relevant information and then seek guidance from a specialist with knowledge of overseas trust matters.
As an alternative it is possible that the trustees or their advisers may be able to offer you guidance on the UK tax treatment of the payment made to your client.
A chargeable gain
The transfer of the shares by trustees will be a disposal. Assuming it is not a bare trust (seems unlikely) they will be liable to UK CGT if they are resident in the UK or the beneficiary might be liable if they are not resident. The acquisition value of your client will be the the value brought into account for CGT purposes for the trustees. However there can be exceptions so as michaelblake says, your client should take advice.