We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Legacy fund
Options

swimingly
Posts: 3 Newbie
in Cutting tax
My husband's father died Oct 2004 and my MiL did a DoV March 2005 on his estate to create a nil-rate legacy fund of £263,000. This was index-linked and was a debt to be secured by a charge over the property. The property is now worth about 500K and the fund approximately 380K. MiL died Aug 2017 and the house remains unsold to date. We have seen various professionals and are now confused about tax issues. Please could you tell me what charges would apply when the house is sold and the fund is released?
i.e. CGT, exit charge etc.
i.e. CGT, exit charge etc.
0
Comments
-
We have seen various professionals and are now confused about tax issues.
Then they weren't professional enough?
https://pilot-portal.tax.org.uk/utilities/att/find-a-member
Do you mean that the DoV created a nil rate band discretionary trust?
The Trustees accepted an "IOU" for the amount, to be satisfied by the repayment of the debt (linked to RPI/House Price Index/something else)?
The index linking in itself creates a taxation issue.
https://uk.practicallaw.thomsonreuters.com/w-007-6723?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=10 -
Yes the DoV created a nil rate band discretionary trust. It was a loan against the property (index linking/RPI).0
-
Yes the DoV created a nil rate band discretionary trust. It was a loan against the property (index linking/RPI).
Then the Trust will have tax to pay on the indexing. See link above and consult a CIOT member.0 -
At 45%? Ouch!0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 351K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.6K Spending & Discounts
- 244K Work, Benefits & Business
- 598.9K Mortgages, Homes & Bills
- 176.9K Life & Family
- 257.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards