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Trust ending

30 June 2009
Issue: 4212 / Categories: Forum & Feedback , Inheritance Tax , Trusts
A property has been held in trust for ten years to provide an income for a widow and her children. The property should now be sold, but there is some concern at how any ten-year tax charge will be paid

A deceased left a property in his will to be let out to provide his widow and two of his three children with income for ten years.

After that time the will directed that the property should be sold and the proceeds shared between the widow and all the children.

The tenth year has now passed but while the property was vacant it was damaged by a flood. Having repaired this damage it is on the market but in the current economic climate no offers have been received.

What is the position on capital gains tax at the end of ten years? There are no funds to pay any tax without a sale.

How does this change if the property is retained by all the beneficiaries or if some of them buy out other parties at the current market value?

Advice and any planning suggestions would be gratefully...

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