Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Charity and cash

06 December 2006
Issue: 4087 / Categories: Forum & Feedback

We act on behalf of a trust. Following the recent death of the life tenant, the trustees are required to pay some relatively small 'legacies' (fixed cash amounts) to individuals and then to hold the remainder for distribution to charities at the trustees' discretion.
Whilst the trust benefited from a capital gains tax free uplift on the death of the life tenant, the investments have increased in value since then.

We act on behalf of a trust. Following the recent death of the life tenant the trustees are required to pay some relatively small 'legacies' (fixed cash amounts) to individuals and then to hold the remainder for distribution to charities at the trustees' discretion.
Whilst the trust benefited from a capital gains tax free uplift on the death of the life tenant the investments have increased in value since then.
As the trust fund is not held entirely for charitable purposes until the legacies have been paid would any gains realised before the legacies have been paid be chargeable to capital gains tax?
Furthermore would gains realised after the legacies have been paid be chargeable to capital gains tax if realised in the same tax year in which the legacies are paid i.e. in a tax year throughout which the trust fund was not held entirely for charitable...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon