Where one beneficiary “buys out” another beneficiary from a Trust, where the only assets within the Trust is real property (which has a gain from the date it was settled into trust), would this be deemed as a disposal for CGT purposes? The property would remain in trust - there is a Power of Appointment within the Deed. If so, who would be liable for the gain, and would there be any SDLT consequences? What would be the best way to document the buying out element.
A starting point is what type of trust was established?
Have you established if any reliefs are available?
Richard C. Bishop
Discretionary, no reliefs (apart from usual AEA).
I assume you are referring to a purchase of a beneficiary’s interest by another beneficiary. If so, no CGT arises assuming the exemption in TCGA 1992 s. 76(1) applies.
I assume the DT is not settlor interested and all persons are UK resident.
Malcolm Finney
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I agree with Malcolm - I questioned the structure as my understanding is there is no CGT when a life tenant of settled property makes a payment to the original remainderman.
The HMRC guidance refers to IIP.
Richard C. Bishop