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Ten-year trouble

10 November 2009
Issue: 4231 / Categories: Forum & Feedback , Capital Gains , Trusts
Ten years ago, a settlor set up a discretionary trust and an inter vivos settlement. It has now come to light that capital gains tax retirement relief and holdover claims were not made at that time.

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.

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