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My son, lucky boy, got left a pot of money by his grandad which was put in trust in the form of shares until he was 18. That happy moment has arrived, but the solicitor says CGT may be liable on the approx 10K increase in value over the past decade or so.
He's not currently working, so if he sells the shares, does his personal allowance cover this, or does he still owe the taxman 20% on anything above his yearly CGT allowance?
His C&H fund thanks you in advance...
Bump!
Hmmm, by no means an expert but if the increase in value has been over 10 years, then any tax should be paid in the year the profit was made (he made around 1k a year), not compounded at the end. I think he needs financial advice!
I thought you only paid CGT on the sale of the shares...
As I mentioned, though, I am clueless.
Capital gains allowance is seperate to your main personal tax allowance. It's 12,300 a year at the moment, so probably doesn't need to pay anything. However I'm not an accountant and the trust thing may complicate things.
I'd just phone HMRC and ask them.
If he has a government ID he can register for the capital property account (which will let you/him put the stuff in) then you get the submission and bill.
https://www.gov.uk/personal-tax-account
I’d just phone HMRC and ask them.
+1
I have a lifetime allowance Q the other day, phoned them up and the chap answered it straight away for me.
Hmmm, by no means an expert but if the increase in value has been over 10 years, then any tax should be paid in the year the profit was made (he made around 1k a year), not compounded at the end. I think he needs financial advice!
No. It's when you realise it. Which is why astute FAs move your money about regularly so you never cash in £12.3k value increase in any one year.
Capital gains allowance is seperate to your main personal tax allowance. It’s 12,300 a year at the moment, so probably doesn’t need to pay anything.
This
Capital gains allowance is seperate to your main personal tax allowance. It’s 12,300 a year at the moment, so probably doesn’t need to pay anything.
Thanks
The wrinkle is that the Trustees who've been holding the shares have offered him the option of selling them and paying him in cash. Looking at it, that seems to be very bad idea because trustees only have a six grand allowance and his is only a third share of the trust...
So if we get the shares transferred over directly, he can sell them at his leisure against his personal allowance?
Mrs Sandwich says no CGT due if he sells due to the £12 300 allowance but the shares would need to be signed over as is. Herself does this for a living but this should be confirmed by an appointed professional advisor though.
Thanks! That was kind of the conclusion I came to.
Hopefully he'll have a few more quid to waste on beer, fags and girls. 🙂