Q&As

What will be the Capital Gains Tax (CGT) liability where a wife has died leaving a Nil Rate Band Trust in her Will. The Trustees, after 3 years since the date of death, wish to make an appointment out of the trust to the surviving husband. The Trust is made up of half share of the principal main residence and £100K investments. If CGT arises, who would be liable to pay and who would benefit out of the appointment?

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Produced in partnership with Harriet Brown of Old Square Tax Chambers
Published on LexisPSL on 26/01/2016

The following Private Client Q&A produced in partnership with Harriet Brown of Old Square Tax Chambers provides comprehensive and up to date legal information covering:

  • What will be the Capital Gains Tax (CGT) liability where a wife has died leaving a Nil Rate Band Trust in her Will. The Trustees, after 3 years since the date of death, wish to make an appointment out of the trust to the surviving husband. The Trust is made up of half share of the principal main residence and £100K investments. If CGT arises, who would be liable to pay and who would benefit out of the appointment?
  • The main residence
  • The investments
  • Liability for tax

What will be the Capital Gains Tax (CGT) liability where a wife has died leaving a Nil Rate Band Trust in her Will. The Trustees, after 3 years since the date of death, wish to make an appointment out of the trust to the surviving husband. The Trust is made up of half share of the principal main residence and £100K investments. If CGT arises, who would be liable to pay and who would benefit out of the appointment?

The fact that the trust is a nil rate band trust should not be relevant and the same question should arise in relation to any discretionary trust (it is assumed that the nil rate band trust in question is discretionary). The basic principle is that capital gains tax (CGT) is chargeable upon trustees as it is on individuals (see section 69 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992)). Consequently, normal capital gains tax principles should apply to any gains generated between the date of death and date of appointment.

The main residence

In relation to the main residence, we assume that the husband and wife jointly owned the main residence and that on the wife's

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