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Where Taxpayers and Advisers Meet

CGT - use of trusts to maximise CGT annual exemption between spouses

Berts
Posts:9
Joined:Thu Jul 28, 2016 3:18 pm
CGT - use of trusts to maximise CGT annual exemption between spouses

Postby Berts » Mon Feb 27, 2017 4:35 pm

My two siblings and I own a building plot on which we expect to get planning permission. We would then sell it and realise a capital gain in excess of our combined annual exemptions. We are considering sharing the ownership with our respective spouses through a deed of trust. The total property value will then be split between us with each having a beneficial interest.

I'd be grateful if someone could confirm if we can utilise a trust so that all six of us will receive the full Capital Gains Tax annual exemption of £11,100. I've read that trustees of some trusts are only given an annual exemption of £5,550.

Many thanks

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: CGT - use of trusts to maximise CGT annual exemption between spouses

Postby maths » Mon Feb 27, 2017 9:04 pm

I've read that trustees of some trusts are only given an annual exemption of £5,550.
This applies to what are referred to as "settlements" for CGT purposes.

What you are proposing to do is to make use of a bare trust which is not a settlement.

With a bare trust it is the beneficiaries of the trust who are liable to CGT on a sale of the trust property, not the trustees.
Hence, each of you get an annual exempt amount.

You need to be sure that the gain on sale is subject to CGT and not income tax.

Berts
Posts:9
Joined:Thu Jul 28, 2016 3:18 pm

Re: CGT - use of trusts to maximise CGT annual exemption between spouses

Postby Berts » Sat Mar 04, 2017 10:50 am

Many thanks maths, that is incredibly helpful


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