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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15915
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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If I receive an inheritance from a family trust, how is this

Resolved Question:

If I receive an inheritance from a family trust, how is this shown on my tax return ?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Was the inheritance cash? You say it was a family trust. Has it been closed down? Did you receive an R185 certificate or just a cheque?
Customer: replied 1 year ago.
The Trust was set up for a family member who has died and left no will. The proceeds are from the sale of a bond but the Solicitor has said that no R185 certificate is necessary as it is a Capital Gain.
Expert:  TonyTax replied 1 year ago.
Thanks.
Leave this with me while I draft my answer.
Customer: replied 1 year ago.
Ok
Expert:  TonyTax replied 1 year ago.
If the bond was actually sold as opposed to being surrendered by the family trust then if there is any gain above the trust exemption, it will be assessed to tax on the trust and you need not report the inheritance.
If the solicitor says the bond belonged to each family member, then if your share of the proceeds was more than £44,000 or your share of the gain is more than £11,000, you need to report it in the CG SA108 pages here:
https://www.gov.uk/government/publications/self-assessment-capital-gains-summary-sa108
I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Yes I believe so, there was no will and the Estate was split into 9 shares of the value of the Estate being £23,338. The Trust was closed in 2006. I will enter the amount in this section.
Expert:  TonyTax replied 1 year ago.
When was the bond sold?
Customer: replied 1 year ago.
I believe in May 2014 , the cheque was received in June 2014.
Expert:  TonyTax replied 1 year ago.
So, am i right in thinking that you held on to the bond for 9 years from 2006 and that it was sold and not surrendered to the issuing company?
Customer: replied 1 year ago.
That I don't know without talking to the Solicitors, what do I need to ask them
Expert:  TonyTax replied 1 year ago.
You need to confirm whether the bond was sold or surrendered as the tax treatment is different between the two.
If the bond was sold and you owned it with your family members, then the cost for CGT purposes will be the value of the bond when you inherited it, ie when the relative who left it to you died. Your share of that "cost" will be deducted from your share of the disposal proceeds to arrive at your gain.
If it was surrendered, there should be a chargeable event certificate issued by the insurance company who issued the bond. I won't go into it unless I need to as its complicated and you won't need to know about it if the bond was actually sold.
Customer: replied 1 year ago.
Okay , thank you for your help. If I need to come back to you I will.
Expert:  TonyTax replied 1 year ago.
OK. Thanks.
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