Do you have to distribute Capital gain in a Trust

If you sell a property within a trust and there is a capital gain on that property do you have to distribute it or could you use it to buy another property within the trust.:confused:
 
Originally posted by RPI
If you sell a property within a trust and there is a capital gain on that property do you have to distribute it or could you use it to buy another property within the trust.:confused:

The trustee can do what-ever they deem fit, if they want to apply the proceeds of a sale to the purchase of another property they can certainly do it.. But the capital gain has been made, thats a done deal, if the Trustee does purchase another property the trust will still be liable for the tax on the capital gain thats ocurred if they choose not to make a distribution.

Dunc.
 
Hi Duncan

Thanks for your quick reply. I spent hours trawling the forum and learnt lots but couldn't answer the question.

Darryl
 
Hi

A trust doesn't pay any tax it must distribute the capital gains to the beneficiaries. The beneficiaries then pay the tax at their own marginal rates.
Remember a trust is not liable to pay any tax just to distribute the profit to the beneficiaries. The beneficiaries can then give back the money after tax to the trust to buy further properties.

Ask your accountant however coz I'm not one.

Regards

Investor :)
 
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