CGT on winding up Trust

[piper777]

hi there hoping for help

can anyone tell me what the tax charges will be on winding up a discretionary trust at present ? I believe exit charge at 6% but confused on rate if Trust is wound up and property in it sold ? i.e CGT tax -----if three beneficiaries do they each get a CGT allowance and is this £5,600?

many thanks

[AnthonyR]

The 6% charge is an IHT charge, rather than a CGT charge and is levied where there are distributions from the trust in excess of the nil rate band. However, it's a maximum of 6% and a complex charge which is based on previous anniversary charges and pro-rated. If the trust value is under £325,000 it is unlikely to apply.

However, if the trustees distribute out assets then there could be a CGT charge as well if the assets have increased in value. However, it's possible to hold over gains where both the trustees and beneficiaries agree. If the beneficiaries then sell the assets they will each benefit from a CGT annual exemption (currently £11,300). If the trust sells the asset it will get a single annual exemption of £5,650 (half an individual's).

[AnthonyR]

I'll also add on my standard disclaimer - trusts are complex and you should seek professional advice!

[piper777]

than you kindly !!

[piper777]

sorry that was meant to say thank you kindly ------really do appreciate !

[maths]

Beware of timing of distribution if hold over relief to be claimed.