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16 April 2019
Property invested on behalf of a beneficiary.
We have been asked to act on behalf of a trust that was established under the will of a deceased grandparent in 2016. About £200 000 was left on trust to a grandchild beneficiary who was 22 at the time but could not inherit the capital until aged 25. The trustees invested the money and purchased a rental property and tax has been paid on the income by the trustees. The beneficiary will soon reach the age of 25 and the property will be transferred directly to the beneficiary.
I have the following questions for readers.
- The market value of the property has increased by about £30 000 since acquisition so does a capital gain of £30 000 arise on the trustees which needs to be disclosed on the trust tax return?
- If so can the capital gain be held over?
- Are there any inheritance tax implications?
Any guidance on the above would...
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