Ten-year trouble

Approximately ten years ago on the advice of a national firm of chartered accountants my client gifted his 95% shareholding in his family trading company into two trusts.

25.26% of the shares were transferred into a discretionary trust and the balance was into an inter vivos trust. My client is a trustee of both trusts. No transactions have been made by either of the trusts in the intervening ten-year period.

At the time of the setting-up of the trusts my client was advised that no tax would be payable on the gift of the shares into the trusts. This outcome was to be achieved by a combination of capital gains tax retirement relief and a holdover claim. The amount of gain to be held over was approximately £200 000.

It has only recently come to light that no retirement relief or holdover claims were made.

I have been...