Trust Reporting

Trust Reporting

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Husband died in 1996 leaving his half of the main matrimonial home to a discretionary trust.  His wife continued to live in the property.

It was decided that the trust would cease in June 2014 and at this date, the property was distributed to the wife.

PPR will apply to the Trustees gain and the value is below the IHT threshold.

As the Trust never had any income or gains, HMRC are not aware of its existence and no tax returns have been completed.

My question is do I now, 8 months after cessation have to complete a 41G Trust for HMRC to set up a Trust record, only to complete a Tax Return showing the gain, covered by PPR and the cessation of the Trust?

This appears to be a waste of time however assume that in order for the Trustees to claim PPR, this will have to be done? 

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By TaxAngel
04th Feb 2015 19:39

Yes, you are right

I had a similar situation, wrote to HMRC with the details and that was what I was asked to do even when I pointed out what a waste of time it was.  I find now when the first spouse dies, HMRC is much more on-the-ball and sets up a trust record and reference and sends letter explaining that trust may have reporting obligations in the future.

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By pjones
04th Feb 2015 19:49

Great thanks

I feared this was the case

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