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Capital Gains Tax and Discretionary Trust

  • 10-06-2015 3:14pm
    #1
    devastar
    Registered Users, Registered Users 2 Posts: 34 ✭


    Hi,

    I'm wondering if anyone might be able to help as the Revenue haven't been the clearest when I spoke with them. My father passed away in 2011 and in his will left a house in a discretionary trust for my younger brother, who is disabled. The trustees are currently selling the house to help support my brother and pay his bills. We have a letter from the revenue saying that the trust is except from Discretionary Trust Tax (DTT) and there is no Capital Acquisitions Tax (CTT) on the house, but if we are selling the property with the intent of all funds remaining in the trust to care for my brother, is the sale liable for Capital Gains Tax (CGT)?

    If it is, is it liable for CGT on the difference between the valuation when it was put in trust and what it sells for? Or how is CGT calculated? We don't have a price the trust acquired it at it was an inheritance. Is there any special circumstances when the proceeds will go into a discretionary trust for a incapacitated person that would negate the CGT? We're very worried as the money from this sale has to support him the rest of his life and he's only 30.


Comments

  • #2
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    Speak to a qualified solicitor or tax advisor

    http://www.taxinstitute.ie/


  • #3
    devastar
    Registered Users, Registered Users 2 Posts: 34 ✭devastar


    Great, thank you! I didn't know that existed.


  • #4
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    devastar wrote: »
    Great, thank you! I didn't know that existed.

    You didnt know solicitors or tax advisors existed?! :confused:


  • #5
    devastar
    Registered Users, Registered Users 2 Posts: 34 ✭devastar


    There is no need to be sarcastic. I didn't realise there was a place you could go specifically to ask about tax queries, no.

    I don't live in Ireland, I'm still a student, both my parents are dead and I have no other brothers or sisters except for my severely disabled brother for whom I am guardian for so I don't have anyone here to ask. That is why I came to this forum, to try and get some constructive help for a very difficult situation.


  • #6
    devastar
    Registered Users, Registered Users 2 Posts: 34 ✭devastar


    There is no need to be sarcastic. I have spoken with my solicitor but she is not familiar with discretionary trusts and I didn't realise there was a place you could go specifically to ask about tax queries, so no I didn't know the Irish Tax Institute existed.

    I don't live in Ireland, I'm still a student, both my parents are dead and I have no other brothers or sisters except for my severely disabled brother for whom I am guardian for so I don't have anyone here to ask. That is why I came to this forum, to try and get some constructive help for a very difficult situation.


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  • #7
    swanvill
    Registered Users, Registered Users 2 Posts: 276 ✭✭swanvill


    Hi,

    I am sorry to hear about your parents and your difficult family circumstances.

    There could be CGT tax payable but that would depend on the sales price of the house & the value when it was inherited/passed into a trust.As a contingency you could keep 30% of the sales proceed one-side for any tax liability you may have. This is a very complex problem and it would be best to contact a solicitor or tax adviser directly

    When selecting anyone to do this work get a couple of people to give you written quotes.


  • #8
    daithi7
    Registered Users, Registered Users 2 Posts: 1,306 ✭✭✭daithi7


    swanvill wrote: »
    Hi,

    I am sorry to hear about your parents and your difficult family circumstances.

    There could be CGT tax payable but that would depend on the sales price of the house & the value when it was inherited/passed into a trust.As a contingency you could keep 30% of the sales proceed one-side for any tax liability you may have. This is a very complex problem and it would be best to contact a solicitor or tax adviser directly

    When selecting anyone to do this work get a couple of people to give you written quotes.

    And ask each of them have they done this type of work before and if so get then ask them to give specific details of the cases (they won't &shouldn't give names), trust, what was at issue, what was involved and outcome, before asking them re details of your specific case. My advice would be to go to the most experienced, professional and cost effective in about that order.


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