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Readers' forum : Concluding a trust

28 November 2017
Issue: 4626 / Categories: Forum & Feedback

What are the trust tax implications of a bequeathed property increasing in value?

My client’s mother died in January 2016. Her will appointed my client and his sister as trustees with discretion to hold dispose of or change assets and distribute income or capital to four beneficiaries including themselves. I assume a discretionary trust came into being on the mother’s death.

Except for some minor savings a life policy and a small occupational pension the bulk of the estate’s value was the former family residence. After initially realising savings investments and pension in 2016-17 the trustees disposed of the property in June 2017.

The property was professionally valued at £875 000 and probate was granted in January 2017. After deducting the joint nil-rate bands of his parents inheritance tax of about £95 000 was paid. Although the property needed updating it turned out that it was worth considerably more and was sold for £1 150...

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