CGT on house left to husband

xylophone

See http://www.tolleytaxtutor.co.uk/taxtutor/files/subscriber/personal-tax/uk-trusts-and-estates/lectures/1d12.pdf

and I will end up sorting the whole lot out,

Who are the Trustees of the Trust? It is their responsibility to sort it out.

If you and your husband are the Trustees, you might telephone the solicitor who drafted the will - he will advise on legal aspects and may well be able to recommend a tax professional to advise on any CGT/IHT/ etc matters.

Otherwise you might try http://www.thepfs.org/yourmoney/find-an-adviser/

Icey77

Yes, my husband is the trustee. It may well be down to him to sort out but in reality that means me as he works hideous shifts in the emergency services and he fully admits he doesn't understand this sort of thing and gets very frustrated by it.

It is better for everyone all round if I do the donkey work and then get him to sign where appropriate etc, this is why I do his tax return.

Will the original solicitor discuss this with me? He is 3 hrs away or do I need to find one local to me? Will the solicitor also be able to advise me on what returns I need to make to HMRC or is that a tax specialist I need to see?

Icey77

xylophone wrote: »

See http://www.tolleytaxtutor.co.uk/taxtutor/files/subscriber/personal-tax/uk-trusts-and-estates/lectures/1d12.pdf



Who are the Trustees of the Trust? It is their responsibility to sort it out.

If you and your husband are the Trustees, you might telephone the solicitor who drafted the will - he will advise on legal aspects and may well be able to recommend a tax professional to advise on any CGT/IHT/ etc matters.

Otherwise you might try http://www.thepfs.org/yourmoney/find-an-adviser/

Ok, having read your first link (very illuminating, thank you!) I think I understand now that my husband is the Trustee and Remainderman for this trust.

I'm not sure if the property is a Relevant Property or a Qualifying IPP Trust - the legal wording is such that I may have missed or not understood a critical nuance.

I am concerned that a trust has to make a return, if a trust is made up of a property that makes no income how is that taxed or is it taxed on the income it would make if my in laws paid an open market rent?

kidmugsy

I recommend two steps. First find a solicitor local to you who can act for the trustee(s), and, to start with, can explain how your husband can add you as a second trustee. That will then leave you free to do the trustees' work while your husband is busy at his work.

Then get the solicitor to explain who will owe CGT, if anyone does. He's not an accountant or a tax expert, but that sort of advice should be well within the scope of a solicitor who is a member of STEP.
http://www.step.org

Once all this is clear in your mind, you should find your anxiety evaporating.

P.S. Having laymen as trustees, and having them pay for legal advice, is often far better than having professionals as trustees, because it's hard to get rid of such trustees but it's easy to replace a solicitor whose service isn't satisfactory.

xylophone

I do not see that the in laws are required to pay rent - the Deed allows them the enjoyment of the property ( or any succeeding property) and its contents?



They are required to pay for upkeep and to make sure that the property is insured in their names and that of the Trustee(s).

With regard to the nature of the Trust, it seems to me ( but I am not an expert), that this is an Immediate Post Death Interest IIP Trust so "Qualifying " - however, your husband/you should take expert advice as above.

I hope you will let us know how it goes.

Icey77

Thank you everyone, I have found a local solicitor via the STEP link from Kidmugsy and will try to get an appointment next week. From there I can understand what needs to be done (2nd trustee etc) and start working on whatever returns needs to be made to HMRC so that everything is done in plenty of time for the 31st Janury

Thanks again!!

getmore4less

If the only assets in the trust are property with life interest it will be relatively straight forward.

The asset just looks like the asset of the tenant.
No CGT but full value for future IHT.

It might be worth asking why the interest in possession was chosen over a discretionary where the beneficiary were not spouse so no transferable nilrate band comes with the asset.

If the new property was less than the old one the excess dropped into residual estate for distribution.

Icey77

An appointment is booked for tomorrow afternoon, hopefully it be worth the £200 + vat per hour :eek::eek: I'll report back with the update of where we stand tomorrow evening hopefully.

Thank you all very much for your help so far, doesn't seem quite so big and scary now!! :beer:

Icey77

Can you get copies of the IHT forms that were filed or is it a case that once submitted and everything tied up and Probate granted they disappear into the depths of HMRC and the Probate Office never to see the light of day again?

I'm sure my husband would have kept a copy - we kept multiple copies of everything else. But now I cant find these forms, all I have is the Estate Accounts which we drew up to show the beneficiaries where all the money came from and where it went.

Is that going to be enough for the solicitor I'm seeing tomorrow - obviously the numbers tie up with the Probate certificate but I could have made it all up ... or am I overthinking this all?

Savvy_Sue

I'm afraid I can't answer your question, but just checking the solicitor asked you to bring ID? In my experience that's the first thing they ask for ...