Help - Selling Property In Trust

[Julliet]

Hello,
I know it is ill advised to sell property held in a discretionary trust however due to circumstances there is no way round.
I know I will be up for cgt (I hate to think) but I wondered if the fact that I have never made a profit off this property and made losses for several years will offset the cgt?
Also, when I do sell the property I was wondering if I can dissolve the trust. (I think it is best to simplify my investments and just use public liability insurance to protect my properties.)
Thanks for your help.

 

[JamesGG]

Hiya,

I trust you have sought legal advice re the choice of structure for future investments. If the consensus there is to no longer use that trust, then yes, you should be able to dissolve it. Your accountant or solicitor (whoever is looking after it for you) should be able to do this for you.

Yes, those losses will help to offset the profits in the trust. If the losses don't completely erode the profit, I would be checking out the trust deed to see if you are able to then distribute the remaining income to any beneficiaries on a lower tax rate then yourself.

Good luck,

James.

 

[Julliet]

Thanks James,
I am glad that the losses will help offset the cgt, can you tell me if the cgt is payable only on the profit I have made on the property eg. if I purchased the property for 200,000 and sell it for 300,000 then do I only have to pay cgt on 100,000?
Thanks James

 

[DaleGG]

Hi Juliet

If the trust has owned the property for more than 12 months then only 1/2 of the $100k gain will be included on the trust ITR. The other 1/2 remains exempt from tax.

Also, don't forget to take into account the costs of buyiong and selling the property and any depreciation claimed on the buildings.


Dale

Thanks James,
I am glad that the losses will help offset the cgt, can you tell me if the cgt is payable only on the profit I have made on the property eg. if I purchased the property for 200,000 and sell it for 300,000 then do I only have to pay cgt on 100,000?
Thanks James