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Where Taxpayers and Advisers Meet

Selling discretionary trust property - hold over relief

scoobydoo355
Posts:2
Joined:Fri May 28, 2021 1:58 pm
Selling discretionary trust property - hold over relief

Postby scoobydoo355 » Fri May 28, 2021 2:08 pm

I am in the process of selling a discretionary trust property for £485K, which will have a gain of around £200K, since set up in November 2012.

I am looking to buy another property for around £520K.

What is the best way, as I have read that I can apply for hold over relief please.

I believe that the new property can be jointly owned by the trust and a non beneficiary.

Also who applies for the hold over relief and can the property be owned by a beneficiary or would that mean that CGT is paid?

Is there a way to remove the funds, roll over the gain and close the trust to avoid the 10 year anniversary charge?

Thanks in anticipation for answers.

Darren

AGoodman
Posts:1247
Joined:Fri May 16, 2014 3:47 pm

Re: Selling discretionary trust property - hold over relief

Postby AGoodman » Mon Jun 07, 2021 10:35 pm

You can't claim holdover relief on a sale. You could potentially claim it on a distribution of the first property under s.260 TCGA 1992 but that will just mean that the beneficiary(ies) who become the owners will pay the CGT on sale with, potentially, the benefit of their annual exemptions.

You may be thinking of rollover relief. That is available on the sale of a qualifying property if the proceeds are reinvested in another qualifying asset.

Are the properties either used in a business or qualifying furnished holiday lets?

scoobydoo355
Posts:2
Joined:Fri May 28, 2021 1:58 pm

Re: Selling discretionary trust property - hold over relief

Postby scoobydoo355 » Tue Jun 08, 2021 8:43 am

The property was recently let on a short term letting, although previously it was let on an AST since 2012 when placed into the trust. The new property will be let on holiday lets.

What regulation or form is used to apply for the rollover relief please? Does this then remove the need to pay the CGT now?

Many thanks for your assistance

Darren


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