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Taxation of Trust FA 23

The document outlines the tax implications for discretionary property trusts (RPT) regarding dividend interest, capital gains tax (CGT), and inheritance tax (IHT) during the lifetime of the trust and at death. It specifies the rates, exemptions, and reliefs available for transfers to and from the trust, including implications for connected persons and the dissolution of the trust. Key points include the annual exemption for trusts, CGT rates, and the principal charge applicable every 10 years.

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vadeko1866
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6 views3 pages

Taxation of Trust FA 23

The document outlines the tax implications for discretionary property trusts (RPT) regarding dividend interest, capital gains tax (CGT), and inheritance tax (IHT) during the lifetime of the trust and at death. It specifies the rates, exemptions, and reliefs available for transfers to and from the trust, including implications for connected persons and the dissolution of the trust. Key points include the annual exemption for trusts, CGT rates, and the principal charge applicable every 10 years.

Uploaded by

vadeko1866
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Trust

Discretionary/
IPDI/IIP Relevant
property trust
(RPT)

Dividend Interest

Net of Net of 20% Net of 45%


8.75%

Gross it up Gross it up Gross it up


100/91.25 100/80% 100/55
%
CGT

In life time At Death


Asset Transferred within No CGT for donor
i. Transferred connected person
To but gift relief Probate value=cost
the trust always available for donee

• Trust is a chargeable person.


While the asset • Annual exemption for trust is
ii. are owned / held £3,000
in the trust • CGT rate 20%/28% only
(calculation is out of course)

RPT
IPDI • Chargeable disposal
iii. Trust dissolved & • No CGT by trust.
asset implications • Transfer within
transferred because connected person.
to trust • Gift relief always
Remainder man dissolved at available because
death immediately
chargeable to IHT i.e
Exit Charge IHT
(calculation out of
course)
IHT

During lifetime At death


Asset • Death estate
Transferred Chargeable life implications
To time transfer • No special
i.
the trust implications

RPT
While asset are • Principal charge
ii. owned/ held into IPDI No Principal will apply
trust Charge • After every 10
years
• Up to maximum
Of 6% of value
of asset held in
trust (Calculation
out of course)

RPT exist
iii.
Trust dissolved & IPDI Charge applies
asset transferred • Settled • Up to maximum of
to remainder men property 6% of value of
In death estate of asset held by
life tenant trust (calculation
out of course)

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