Estates—income tax and CGT

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Types of income for income tax purposes

Types of income for income tax purposesThe main types of income are:•employment income•pension income•social security income•trading income•property...

Trust disputes—breach of trust

Trust disputes—breach of trustIt is a fact of life that beneficiaries and trustees fall out. Often this is due to misunderstandings but occasionally...

Trust disputes—action for breach of trust

Trust disputes—action for breach of trustBreach of trustBeneficiaries may consider proceedings either to restore a trust fund or obtain compensation...

Trustees—duties

Trustees—dutiesNature of dutiesThe difference between a duty and a power is:•the performance of a duty is obligatory•powers are to a greater or lesser...

Practice notes

Trustees—appointment of trustees

Trustees—appointment of trusteesOriginal trusteesTrustees will usually be appointed by the instrument that brings the trust into existence. The trust...

19th May

In-house

Practice notes

Capital gains tax issues on death

Capital gains tax issues on deathSTOP PRESS: The Office of Tax Simplification published its first report on the review of capital gains tax (CGT) on...

19th May

Practice notes

What is an offshore trust?

What is an offshore trust?A trust is formed either by lifetime gift or on death when a person (the settlor) transfers assets to another person or...

Produced in partnership with Mourant Ozannes and Carey Olsen 19th May

Practice notes

Nature and classification of trusts—the three certainties

Nature and classification of trusts—the three certaintiesCertaintyIn order for a settlor to create a private express trust the three certainties must...

19th May

Practice notes

Private Client—Luxembourg—Q&A guide

Private Client—Luxembourg—Q&A guideTaxation regimeWhat factors determine tax liability in your jurisdiction (eg domicile, residence or...

Produced in partnership with Eric Fort of Arendt & Medernach 19th May

Practice notes

Creation of trusts—beneficiaries

Creation of trusts—beneficiariesWho may be beneficiariesEvery person who would be capable of owning property if of full age and sound mind may be a...

19th May

Q&As

When can a mistake in an executed deed be rectified by a manuscript amendment rather than by a deed of rectification?

When can a mistake in an executed deed be rectified by a manuscript amendment rather than by a deed of rectification?This Q&A explains when it is...

Produced in partnership with Emma Holland of Stewarts Law 19th May

Precedents

Deed of revocation of ordinary power of attorney

This Deed OF REVOCATION is made on [date] by me [name of donor] of [address of donor].This Deed provides:1Revocation...

19th May

Practice notes

Trustees—statutory powers of trustees

Trustees—statutory powers of trusteesSource and availabilitySourcesTrustees have certain powers conferred on them by statute, in particular by the...

19th May

Practice notes

Trustees—removal of trustees

Trustees—removal of trusteesA trustee may be removed against their will in any of the following ways:•under an express power in the trust...

19th May

Q&As

At what stage and to whom can a Deed of Appropriation take place when selling a second property in an estate?

At what stage and to whom can a Deed of Appropriation take place when selling a second property in an estate?We assume you refer to the situation when...

19th May

Practice notes

Creation of trusts—blind trusts

Creation of trusts—blind trustsWhat is a blind trust?A blind trust is a trust that is aimed at preventing conflicts of interest arising. Usually, the...

Produced in partnership with Michael O’Sullivan of 5 Stone Buildings 19th May

Practice notes

Termination of trusts—methods of termination

Termination of trusts—methods of terminationDuration of a trustThe duration of an express trust is subject to the restrictions imposed by the rules...

19th May

Practice notes

Costs and expenses in the Court of Protection

Costs and expenses in the Court of ProtectionThere are court fees and disbursements which will be payable by all applicants on making a new...

19th May

Practice notes

Statutory Wills—Court of Protection applications

Statutory Wills—Court of Protection applicationsWhat is a statutory Will?Where a person is incapable of making a valid Will for themselves, the Court...

19th May

Practice notes

Trustees—power of advancement

Trustees—power of advancementWhere a beneficiary either:•is a minor (ie under the age of 18) and unmarried or•has attained majority or has married...

19th May

Most recent Estates—income tax and CGT content

Q&As

A charity becomes absolutely entitled to the trust fund (comprised of shares) on the death of the life tenant. If a chargeable gain on the shares arises between the date of death of the life tenant and the date of sale, can the trustees of the life interest trust appropriate the shares to the charity so that it can sell the shares without incurring a chargeable gain? Is there a precedent for appropriation by trustees?

A charity becomes absolutely entitled to the trust fund (comprised of shares) on the death of the life tenant. If a chargeable gain on the shares...

15th Jul

Q&As

A UK residential property in an estate has been disposed of at a loss and the personal representatives wish to claim inheritance tax relief. Are they also obliged to report the disposal to HMRC within 30 days for the purposes of reporting capital gains tax on disposals of UK residential property?

A UK residential property in an estate has been disposed of at a loss and the personal representatives wish to claim inheritance tax relief. Are they...

21st Jun

Q&As

A dies leaving a legacy of an investment portfolio to B. B subsequently dies before A's estate is administered. A's executors have now sold the investment portfolio and have transferred the net proceeds of sale to B's executors. A's executors have indicated to B's executors that B's estate will need to account for any capital gains arising on the investment portfolio from the date of A's death to the date of sale. Our view is that any capital gains relating to B's estate should only be calculated from the date of B's death, as B had a vested interest in the portfolio and so there would have been a tax free uplift on B's death. What is the CGT position?

A dies leaving a legacy of an investment portfolio to B. B subsequently dies before A's estate is administered. A's executors have now sold the...

17th Jun

Q&As

Where a life interest trust of a residential property contains a provision requiring the life tenant to pay ‘all outgoings’ associated with the property, what exactly would this cover? In particular, would it include a responsibility to pay buildings insurance?

Where a life interest trust of a residential property contains a provision requiring the life tenant to pay ‘all outgoings’ associated with the...

6th Jun

Q&As

What is the income tax treatment of a residuary beneficiary under a Will?

What is the income tax treatment of a residuary beneficiary under a Will?For guidance on income tax during the period of administration and the income...

6th Jun

Q&As

The sale value of shares has increased since death taking the value of the estate just slightly over the probate value. Are we allowed to deduct the administration charges for selling the shares?

The sale value of shares has increased since death taking the value of the estate just slightly over the probate value. Are we allowed to deduct the...

6th Jun

Q&As

How is the Standard Rate Band allocated between the settlors of a discretionary trust and how is the CGT annual exempt amount allocated as between the settlors of such a trust? Also, where a trust has more than one settlor, is the trust treated as one trust or multiple trusts, for income tax and CGT purposes?

How is the Standard Rate Band allocated between the settlors of a discretionary trust and how is the CGT annual exempt amount allocated as between the...

6th Jun

Q&As

Where an individual died over 30 years ago leaving no Will and the only asset in their estate was a residential property which has been occupied by one of the two beneficiaries (under the intestacy rules) throughout, what options are available to the deceased's personal representative to mitigate capital gains tax (CGT) on the sale of the property?

Where an individual died over 30 years ago leaving no Will and the only asset in their estate was a residential property which has been occupied by...

6th Jun

Q&As

How is a contingent pecuniary legacy, which does not carry the intermediate income, taxed from an income tax, CGT and IHT perspective?

How is a contingent pecuniary legacy, which does not carry the intermediate income, taxed from an income tax, CGT and IHT perspective?This Q&A looks...

Produced in partnership with Piers Feltham of Radcliffe Chambers 6th Jun

Q&As

An individual A died in 2008 and their spouse B was sole executor of the estate and partially administered without taking out a grant. Following B's death, the replacement executor named in A's Will renounced probate. A specific legacy was paid out of A's estate but the residue remains due to B (now B's estate). Who is able to obtain a grant in relation to A's unadministered estate? How should the value of A's assets at the date of death be ascertained given the lapse of time?

An individual A died in 2008 and their spouse B was sole executor of the estate and partially administered without taking out a grant. Following B's...

6th Jun

Q&As

Where executors have sold an asset subject to a specific legacy at a gain, in the absence of a formal Assent, is the legatee entitled to the full proceeds of sale without any deduction for capital gains tax?

Where executors have sold an asset subject to a specific legacy at a gain, in the absence of a formal Assent, is the legatee entitled to the full...

6th Jun

Q&As

Where an individual A leaves assets on trust for their civil partner B for life with remainder to charity and B then dies during the administration of A’s estate, how is the gain on the estate/trust assets which accrued between A’s and B’s deaths treated for CGT purposes? At what point will the assets from A’s unadministered estate vest in the charity remaindermen?

Where an individual A leaves assets on trust for their civil partner B for life with remainder to charity and B then dies during the administration of...

5th Jun

Q&As

A French born intestate deceased was domiciled and paid tax in the UK. The majority of their assets (all but £700) are held in France. Would income and CGT on the estate be payable in the UK and in the absence of a UK administrator who is liable to declare same?

A French born intestate deceased was domiciled and paid tax in the UK. The majority of their assets (all but £700) are held in France. Would income...

5th Jun

Q&As

In an estate where there is a business that will continue to generate income during the administration, can the income be dealt with in a SA tax return by the sole beneficiary (who continues to run the business) or will it have to be dealt with as part of the estate?

In an estate where there is a business that will continue to generate income during the administration, can the income be dealt with in a SA tax...

5th Jun

Q&As

Are there any issues to be aware of if the executors of an estate appropriate a property subject to a mortgage to a beneficiary before the property is sold in order to be able to offset the beneficiary’s losses against a capital gain arising on the sale?

Are there any issues to be aware of if the executors of an estate appropriate a property subject to a mortgage to a beneficiary before the property is...

5th Jun

Q&As

Where the terms of a loan are that money will be repaid at a percentage value of a house at the time of sale, would a ‘gain’ in this instance be liable to income or capital gains tax for trustees?

Where the terms of a loan are that money will be repaid at a percentage value of a house at the time of sale, would a ‘gain’ in this instance be...

5th Jun

Q&As

A property is held by H’s executors as part of the unadministered estate of H. The property was held as tenants in common with H’s wife, W, who has subsequently died. H’s executors acquired the property from H at the market value of the property at the date of H’s death under section 62 of the Taxation of Chargeable Gains Act 1992. Do the executors of H benefit from a second uplift in value for capital gains tax at the date of W’s death or is the increase in value between the date of H’s death and the date of W’s death a chargeable gain?

A property is held by H’s executors as part of the unadministered estate of H. The property was held as tenants in common with H’s wife, W, who has...

5th Jun

Q&As

Where an estate contains two properties with one sold at a gain as compared to date of death value and one sold at a loss and where the CGT position has already been reported in Self Assessment returns, in what circumstances can the personal representatives claim for loss on sale of land relief for inheritance tax purposes?

Where an estate contains two properties with one sold at a gain as compared to date of death value and one sold at a loss and where the CGT position...

Produced in partnership with Paul Davies of Clarke Willmott 5th Jun

Q&As

A property which is the subject of a specific legacy is sold by the personal representatives for a gain. The specific legacy is stated to be 'free of tax' and the legatee and residuary beneficiaries are different people. Who is liable for the capital gains tax, if any?

A property which is the subject of a specific legacy is sold by the personal representatives for a gain. The specific legacy is stated to be 'free of...

5th Jun

Q&As

Where one trustee is resident abroad and one in the UK and at the time of the settlement the settlor was UK resident but not domiciled, what is the residence of the trust for UK tax purposes?

Where one trustee is resident abroad and one in the UK and at the time of the settlement the settlor was UK resident but not domiciled, what is the...

5th Jun

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Estates—income tax and CGT

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TR1 declaration of trust—absence of agreement insufficient for rectification (Ralph v Ralph)

SDLT—no MDR for land with planning permission (Ladson Preston and AKA Developments v HMRC)

Private Client weekly highlights—22 July 2021

Taxpayers had no right to attend third party information notice application hearing (Kandore v HMRC)

Featured Private Client content

Types of income for income tax purposes

Trust disputes—breach of trust

Trust disputes—action for breach of trust

Trustees—duties

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