CGT Holdover and PPR

Trusts Discussion
1

Client puts a property into trust with a gain of £150,000. Hold-over relief is claimed. Subsequently the property appreciates £50,000 in value and is transferred out of trust to a beneficiary, and again hold-over relief is claimed, on the gain held-out. The beneficiary subsequently lives in the property for 7 years and then dies. Is it correct that because of s226A no PPR is available at all, or does PPR apply for the 7 years during which the beneficiary was owner and occupier?

Haroon Rashid
I Will Solicitors Ltd

2

PPR relief is not applicable because there is no disposal by the deceased (s. 62(1)(b) TCGA). The executors acquire the property at its market value at the date of death. If the deceased had sold the property during his life then there would have been no PPR relief available because of s. 226A.

Paul Davies
DWF LLP

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