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Trigger point for cost for CGT trust disposal

Which date do I use for the original cost of a property disposal in a trust

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Good morning!  I am familiar with CGT on the usual disposals of property or businesses but I have a situation I would appreciate a second opinion on.

I have a client who is a trust which holds a property.  It was set up many years ago on the death of lady.  The beneficiaries were her two children (brother and sister) and her 3 grandchildren.  The sister was permitted under the terms of the trust to live in the property until her death or as long as she desired with the proviso that she kept it in good repair.  She lived in the property until 2014 when she moved to a care home until her death in Jan 2018.  The house has now been sold (it was a condition from the council to pay care home fees) in Sept 2018.

The house couldn't be sold during the sister's lifetime without her written approval, which she gave and then changed her mind.  This meant the trustees could not sell the house until her death.  The property was rented out by the trust for the last 3 years to recoup some of the money that had to be spent on the house since it wasn't maintained while the sister was in residence and so the trustees had to fund repairs.

Sorry for the long history but my question is - I can see that the final disposal is the trigger point for CGT in the trust but at what date does the period start - and therefore what cost do I use? Is it when the property came into the trust, or a date when it is deemed the sister's life interest ceased which could be the date the sister left the house or the date she died as she didn't give permission to sell?  Would this also mean there was an earlier CGT trigger point for the sister when she relinquished life interest (with PPR to consider)?

Any advice gratefully received.

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By Tax Dragon
30th Nov 2018 10:43

You'll need to consider entitlements and changes thereto very carefully, but the relevant legislation is TCGA 1992 and probably most relevant is Pt3 Ch2.

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