House in Trust

Spendit_Sue

I put part of my house in trust for siblings and now want to sell. will I need to pay IHT/CGT on their share of the proceeds?  Or will IHT/CGT only be payable if I don’t survive 7 years?  I am the legal owner of the property.  

sammyjammy

What kind of trust?  What did you hope to achieve by the trust?

HobgoblinBT

Have you checked the U.K. Gov website on Trusts and Taxes?  

The Trust will be liable to pay Capital Gains Tax on any gain above £3000 in the current tax year or £6000 if the beneficiary of the trust is disabled.

Keep_pedalling

You are only the legal owner of part of your house, the trust is the legal owner of the other part. You won’t need to pay CGT but the trust will have to if the value of its share has increased since you gifted the share of your home to the trust. You are however still the beneficial owner of the whole property which means the 7 year rule does not apply and regardless of how long ago the trust was set up the whole house still forms part of your estate for IHT purposes.

99 times out of 100, putting your home in trust is a bad idea and this is one of the reasons why. who are the trustees? 

Spendit_Sue

Thank you for your replies.  I think the solicitor is the Trustee I don’t honestly know.  The house isn’t worth much anyway though still a lot of money to me.   I’ll need to speak to the solicitor who set it up as I need to know the consequences when I come to sell.