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Will and a Trust

(4 Posts)
bananaskin123 Mon 06-Mar-17 17:36:49

Just a bit of back story: my dad died way back in the 70's at a young age. My younger brother had died two years previously after an RTA. My mum passed away in August at the grand old age of just over 100. Her Will was with the solicitors who had always looked after our family. Two years after dad died parts of his Will were changed to a Deed of Family arrangement which was signed by my mum, my older brother and myself. This seems to have become a Trust and in that Trust is a property my mum has left to me.

Solicitor is still processing the Will but has told us there will be IT to pay on her estate and also a separate sum on the Trust property,

Just wondered if anyone could tell me would it be CGT on the property so that the estate is inheritance tax. The process still seems to have a long way to go before its finally sorted. I am one of the two Trustees but am just trying to gather some information so I can get my head around the process.

Apologies if I haven't explained very clearly. What I'm asking is whether there are two charges on the estate and what the second might be and would that also be 40%. So hope not as I would have no chance of keeping the property which is rented out as a business.

scaryteacher Mon 06-Mar-17 20:53:03

I think it might be CGT on the property in trust, but presumably only when the gain is realised iyswim?

Is the estate over the IHT limit, and has any allowance due from your dad been taken into account, so the full £650k IHT exemption gets applied?

bananaskin123 Mon 06-Mar-17 21:08:24

Thanks Scary. Maybe it is CGT. Can I ask how the gain is realised? Does it mean the rent collected on the property? The rest of the estate is going to be, according to the solicitor, over the IHT limit. Originally he thought there might be some allowance due from dad but now he believes that might not be the case sadly. The valuation on the business called the Trust is £265,000. Its rented out and has a tenant with a lease.

scaryteacher Tue 07-Mar-17 12:32:19

Dh has a share of a property in trust, and the gain will be realised when the property is sold and monies distributed. You might want to read the Deed of Family arrangement to see what it says, and so talk to HMRC, who are very helpful with these things.

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