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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am the beneficiary, with my brother, of my mother's NRB

Resolved Question:

I am the beneficiary, with my brother, of my mother's NRB will trust. which includes her share of the property my parents owned. We are now selling the property as my father has moved to a care home. I am trying to understand what my potential tax position might be when the property is sold and the trust ended.
Submitted: 1 month ago.
Category: Tax
Expert:  bigduckontax replied 1 month ago.

Hello, I am Keith, one of the experts on Just Answer. and pleased to be able to help you with your question.

I must say that I can see no point in a NRB at all. If one spouse dies the remaining spouse automatically inherits the unused 325K of their partner. If this house was their sole or main domestic residence then Private Residence Relief applies which relieives Capital Gains Tax (CGT) at 100%. not many people raealise that when they sell their home they are liable to CGT on the gain as PRR relieves it and is given automatically.

I do hope that I have been able to set your mind st rest on this matter.

Customer: replied 1 month ago.
Thank you for your response. I have never lived in the property and live in my own property elsewhere so PRR does not apply to me. Therefore will the gain in value create a taxation liability for the trust or for me personally? I have read that the GCT allowance for trusts is lower, and so is the tax rate.
The NRB was used because my mother's will was written in 2003 and she died in 2010 without updating it to the new legislation.
Expert:  bigduckontax replied 1 month ago.

You are correct that CGT for trusts is half the normal Annual Exempt Amount (AEA). However I am of the opinion that PRR will apply.

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 1 month ago.
Thank you - I hadn't remembered about PRR. I think this will help me take the matter forward so I have no further questions.
Expert:  bigduckontax replied 1 month ago.

Thank you for your support.