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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 16908
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I live in the US but am UK citizen. We ( my brother and I)

Customer Question

I live in the US but am UK citizen. We ( my brother and I) are liquidizing 200000 pounds from a trust set up by my mum ( we are the beneficiaries) we are buying her a flat in an assisted living development in the UK. The money will go into my UK bank account- what is my tax liability from US/UK perspective?
JA: Have you talked to a tax professional about this?
Customer: No
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Customer: My brother lives in Ausstralia
Submitted: 15 days ago.
Category: Tax
Customer: replied 15 days ago.
Hello??
Customer: replied 15 days ago.
Hello?
Expert:  Sam replied 15 days ago.
Hi

First there could be a tax charge taking the shares out of the trust so what type of trust is this ? As its the trust that you pay the capital gains tax arising

Thanks

Sam

Customer: replied 15 days ago.
It’s a family trust set up by parents with 2 children as beneficiaries. Held with investment broker
Expert:  Sam replied 15 days ago.

Hi

Do a care or discretionary trust - when did it start

Thanks

Sam

Customer: replied 15 days ago.
Discretionary - 2001
Expert:  Sam replied 15 days ago.

Apologies so it is a bare of discretionary trust ?

Customer: replied 15 days ago.
Taking the amount that does not cause tax charge for taking it out ( 202k pounds)
Customer: replied 15 days ago.
I don’t know what bare of discretionary trust means?
Expert:  Sam replied 15 days ago.

Hi

I am afraid it will the capital gain arises on the trust

Thanks

Sam

Expert:  Sam replied 15 days ago.

You have just told me its a discretionary trust

Customer: replied 15 days ago.
But this says a discretionary trust is treated as if it’s already paid 45% tax?
Customer: replied 15 days ago.
It’s a discretionary trust- you had asked me if it’s “ bare of discretionary trust” and I had replied that I didn’t know what that meant
Expert:  Sam replied 15 days ago.

Hi

It states

If assets are taken out of a trust

The trustees usually have to pay the tax if they sell or transfer assets on behalf of the beneficiary.

There’s no tax to pay in bare trusts if the assets are transferred to the beneficiary.

Sometimes an asset might be transferred to someone else but Capital Gains Tax is not payable. This happens when someone dies and an ‘interest in possession’ ends.

Neither of these applies so capital gains are due

Thanks

Sam

Customer: replied 15 days ago.
Hmm I’m confused now! Who would I lay capital gains tax to as I live in the US and we are conducting this in the UK
Customer: replied 15 days ago.
Pay*
Expert:  Sam replied 15 days ago.

Hi

The TRUST pays capital gains not you as beneficiaries- the trust is in the Uk so yes capital gains are due on taking out this money from a live trust yet to arrive at its fruition

Thanks

Sam

Customer: replied 15 days ago.
Ok thanks!
Expert:  Sam replied 15 days ago.

Hi

You are very welcome - the point of  a trust is to avoid Inheritance tax by remaining intact until the death of the creator any movement or sale of assets before that time will give rise to charged on the trust

Thanks

Sam

Customer: replied 15 days ago.
Thanks
Expert:  Sam replied 15 days ago.

You are very welcome

Thanks

Sam