Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Capital to income

18 September 2012
Issue: 4371 / Categories: Forum & Feedback , Capital Gains
A trust owns a let property and has a £15,000 tax pool, but income has been spent on repairs to the property. The property has been distributed to the beneficiaries and subsequently sold

I have been asked to deal with the capital gains tax computation for a trust which owns a single asset; namely a let property.

No previous professional advice had been taken and there is an issue over the ten-yearly and exit charges but this is not immediately relevant.

The trust had built up a tax pool of about £15 000 but unfortunately over the years capital repairs have absorbed virtually all the net of tax income so that there was almost no cash available from which to make income distributions (in fact the beneficiaries have had to lend the trustees money to pay legal costs).

The trustees advanced the property out of the trust to the four beneficiaries (all basic-rate taxpayers) to take advantage of their annual exemptions (using holdover claims so as to reduce the overall capital gains tax bill) and shortly afterwards ...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon