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Tax on a bare trust for a U18
baby_boomer
Posts: 3,883 Forumite
in Cutting tax
I set up a bare trust for my grandson with Hargreaves Lansdown, which lasts until he is 18. Is this trust liable to capital gains tax? And if so, is it payable by the trustee or by the child? The sums involved aren't large and it didn't seem relevant until the Tories decided to cut the CGT limit from £12.5K in 2022/3 to £3K in 2024/5. I was wondering whether I needed to take some capital gains before the CGT allowance fell to £3K.
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Comments
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If it is a bare trust, the capital gains are assessable on your grandson. if the trustees sell the assets on your grandson's behalf, they can hold on to the tax and pay it for him, but he will have to complete a self assessment tax return.1
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Thanks Jeremy. I feared as much, although it would be worse if the capital gains were assessed on me! It is definitely a bare trust - a HL Vantage Junior Investment Account if anyone else is in the same situation. Could anyone else please confirm Jeremy's assessment for my peace of mind?0
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I have assumed that income is also assessed on my grandson. Hope this is the case.0
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Yes it is. It is only when the child's parent is the donor that the child's income is aggregated with that of the parent (if over £100).1
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