Simple Trust CGT on Inheritance Property ??

by **mike777** on Wed Jan 04, 2012 1:27 pm

As it stands there would be no tax liability if my parents passed their house to me if they became deceased as it is below IT thresholds.
If they wrapped a simple trust around it for me now 2012 and they passed away in say 20 years, I believe I'm correct in thinking any increase in value will be taxed at the prevailing CGT rate then.
The reason they looked at a simple trust is to protect their house from being claimed by a nursing home in future as happened to their neighbour.
Is it better to look at a simple trust at a future date.

I don't like contemplating this stuff but they are a bit stressed out on which avenue to take so I don't have any large tax burden or lose it to some nursing home.

by **mike777** on Wed Jan 04, 2012 1:30 pm

Sorry, I meant I'm worried I may be liable for difference of 2012 house value vs say 2022 value at 28% CGT...could be a massive bill.

by **mike777** on Thu Jan 05, 2012 2:15 am

Is this the correct sub-forum for this question....?
Not sure if it was CGT section or Property.

I'm pretty sure that I'll get hit for CGT for difference in 2012 price vs say 2040 price as the house may be wrapped in a simple trust this year !
Someone please give me a tip on this sitiation...

by **maths** on Thu Jan 05, 2012 4:52 pm

Not sure i know what you're trying to get at re "wrapping a simple trust round the house" ?

If they gave you their house but continued to live in it then on a future sale you would be exposed to CGT on difference between sale value and market value at date of gift at your CGT rate at the time of sale.

If they transferred their house into a discretionary trust (you being one of the beneficiaries) under which they are entitled to occupy under the trust then on their deaths no CGT would arise on the transfer of the property by the trustees to you.

As their estate is below the IHT threshold the iht consequences can be ignored.

by **mike777** on Sat Jan 07, 2012 12:49 am

maths wrote:If they transferred their house into a discretionary trust (you being one of the beneficiaries) under which they are entitled to occupy under the trust then on their deaths no CGT would arise on the transfer of the property by the trustees to you.
As their estate is below the IHT threshold the iht consequences can be ignored.

Thanks Maths.I guess you are a tax consultant or know the simple trust area ?
That is a surprise, I though CGT would have accrued from simple trust date value. A relief to hear it.