What type of trust is the NRB trust?
The CGT outcome will be different if the trust is, say, subject to an immediate post-death interest in favour of whoever was living there (the widow? Either of the sons?), or is a discretionary trust and the trustees have not given any of the beneficiaries a right to reside or a life interest.
If, as I suspect, the trust is a discretionary trust and there has been no appointment of a right to reside in favour of any of the beneficiaries, despite the fact that some of them may have lived in the property since the husband’s death I understand that main residence relief is not available to the trustees (as none of them will have had a “right to reside” for the purposes of s.225 TCGA 1992).
If the property interest is appointed out to the sons before sale, they would be able to use their personal UK CGT allowances to reduce the amount of CGT payable. However, the non-UK beneficiary may also be liable for tax on his share of the gain in his own tax jurisdiction; and the son within the UK may find that he is disqualified from claiming the “first time buyer” allowance for SDLT (if not already a property owner).
In any event, a CGT return will need to be made within 30 days of completion of the sale, and the CGT paid, either by the trustees (if a trustee sale) or by both of the sons (if appointed to them before the sale).
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals