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bigduckontax, Accountant
Category: Tax
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Trustees (who are the ultimate beneficiaries under a Declaration

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Trustees (who are the ultimate beneficiaries under a Declaration of Trust effected in May2002) sell the house, vacant since the mother (sole life tenant & entitled to the trust income up to her death) permanently moved into residential care. What are the capital gains tax implications on (a) the beneficiaries (b) the mother?
, I'm Keith and happy to help you with your question.
From the tenor of you question the Capital Gains Tax (CGT) would appear to fall on the trustees and any gain on disposal will be taxed at 28%. I have assumed from the wording of your question that this was not a bare trust. Your mother is out of the equation altogether and no CGT liability would appear to attach to her.
I do hope i have been able to shed some light on your problem.
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Customer: replied 3 years ago.

Keith thanks that the CGT liability rests solely with the Trustees. The Trustees have received advice that if they start renting out the property now(to produce funds to contribute to the care fees) then when the house is sold, its valuation at commencement of renting will be the ''acquisition value' to set against proceeds to evaluate the capital gain. My feeling is that the value at May 2002 will apply? Am I correct?

I concur with your opinion regarding the value as at May 2002 being the acquisition value. I would be interested to know on what grounds the advice to the Trustees was given, but may suspect that those who gave the advice will now emulate Brer Fox ' lay low and say nuffin!' However, if the Trustees can get away with the renting commencement, well good luck to them!
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Thank you support.