A&M trust - distributing property to beneficiaries

[fax machine]

A property has been placed into an A&M trust. During its period in the trust it has been a furnished let.

I believe that holdover relief is available when the property is distributed to the beneficiary. Let us say the tapered gain is £20,000. I presume that professional fees advising on this can be offset against the CGT computation?

Can the trust offset the £4,100 annual CGT exemption against the £20,000 gain held over... so that the gain held over to the beneficiary is £15,900? (£4,100 might just be last year's rate, whatever.)

The beneficiary intends to make the property his main residence, and wishes to claim PPR relief. I think I once read somewhere that the chancellor had done something to trusts with regard to PPR; can anybody, please, confirm this, and whether it is likely to apply in our circumstances.

If PPR relief cannot subsequently be claimed, presumably it will be possible to pay the tax at this point on the gain accrued whilst the property has been in trust.

Very many thanks.

[Lee Young]

If holdover relief is claimed then PPR can never subsequently be claimed by the beneficiary. Probably best to pay the tax now.

If hold over is claimed the annual exemption available to the trustees is not applicable, and nor can the costs of advice be deducted.

[fax machine]

Thanks, Lee - and for your comments on the other thread.

If holdover is NOT claimed, then is it possible to claim costs of advice of disposal?

If holdover is claimed, are the costs of conveyancing a tax nothing?

And finally, if holdover is claimed on the holiday let, is it subsequently possible to rollover the heldover gain into a different holiday let? I'm guessing no... so could it be done the other way round, the trust selling the holiday let, rolling over the gain into a new holiday let and then holding over the gain on distribution to the beneficiary.

[Lee Young]

sorry, my second comment above is wrng as the held over gain is after the costs of disposal are deducted.

rollover relief may be an option if both assets are business assets for that purpose.