Closing trust and house.
Discussion
Youngest kidda reaches 18 in a few months and technically we can then shut the trust for her and her sister (executor sick of doing pathetic tax returns, to pay tax and then reclaim every year, talk about a massive bureaucratic joke the HMRC are 
)
The plan is to take the house out of trust and transfer into the 2 kids names then shut the trust. I suppose by end of next march at latest as that's the end of the tax year.
The biggest/only concern is capital gains on the house over the 5 years being in trust. Would a straight transfer to the children negate this possibility rather than selling it ?
Presently the house is tenanted (although eldest daughter would possibly like to move in with the BF and all associated problems) or do we move the tenant out and one daughter in so it is their main residence. Best I can see from link is in the picture?
Hope I've explained that clearly enough...
ETA house valued low at £250k 5 years ago so now worth £280k probably nearer £300k
What a PITA this has been for 5 years using a useless solicitor firm to set up wills who then shut down about the same time as 2 family deaths
https://www.gov.uk/trusts-taxes/trusts-and-capital...
)The plan is to take the house out of trust and transfer into the 2 kids names then shut the trust. I suppose by end of next march at latest as that's the end of the tax year.
The biggest/only concern is capital gains on the house over the 5 years being in trust. Would a straight transfer to the children negate this possibility rather than selling it ?
Presently the house is tenanted (although eldest daughter would possibly like to move in with the BF and all associated problems) or do we move the tenant out and one daughter in so it is their main residence. Best I can see from link is in the picture?
Hope I've explained that clearly enough...
ETA house valued low at £250k 5 years ago so now worth £280k probably nearer £300k
What a PITA this has been for 5 years using a useless solicitor firm to set up wills
who then shut down about the same time as 2 family deathshttps://www.gov.uk/trusts-taxes/trusts-and-capital...
Edited by anonymous-user on Sunday 6th June 11:26
The trust will pay full CGT on that. Tax is charged on the gain, less any costs of acquisition/disposal or genuine improvements (not repairs). The trust gets a tax free CGT allowance at 50% of the individual's rate, so £6,150 of gain is tax free.
There will almost certainly have been significant tax savings somewhere in the picture and even if there weren't actual tax savings there will have been potential tax savings. For instance, it's kept £300k out of your estate which might otherwise have been taxed at 40% if you popped your clogs. So there's not really anything to complain about. If you want to side-step tax and/or gain financial flexibility you can reasonably expect to have to do a bit of work for i - there aren't many "free lunches" around.
There will almost certainly have been significant tax savings somewhere in the picture and even if there weren't actual tax savings there will have been potential tax savings. For instance, it's kept £300k out of your estate which might otherwise have been taxed at 40% if you popped your clogs. So there's not really anything to complain about. If you want to side-step tax and/or gain financial flexibility you can reasonably expect to have to do a bit of work for i - there aren't many "free lunches" around.
Thanks 
It was never in my estate went straight from FIL to grandchildren, total estate was only about £350k including house and it had a tax allowance of £650k,
Just need to think of a workaround on £30k if we can get house valued at £280, so only £30k uplift over 5 years split between the 2 beneficiaries/kids
It was never in my estate went straight from FIL to grandchildren, total estate was only about £350k including house and it had a tax allowance of £650k,
Just need to think of a workaround on £30k if we can get house valued at £280, so only £30k uplift over 5 years split between the 2 beneficiaries/kids
I know it wasn't in your estate - that's a big part of the whole point.
It's almost certainly the trust that pays the CGT, not the kids, and the tax amount should be "manageable" even at the enhanced rate for residential property. Just don't forget YOU mustn't pay the tax or you'll upset the whole tax apple-cart. Build up cash in the trust to pay the CGT before transferring the house to the kids, then wind up the trust. (Note: Detail may vary with type of trust.)
It's almost certainly the trust that pays the CGT, not the kids, and the tax amount should be "manageable" even at the enhanced rate for residential property. Just don't forget YOU mustn't pay the tax or you'll upset the whole tax apple-cart. Build up cash in the trust to pay the CGT before transferring the house to the kids, then wind up the trust. (Note: Detail may vary with type of trust.)
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