In this section:
Trusts and Capital Gains Tax
Trusts offer a means of holding and managing money or assets for people who may not be ready or able to manage them for themselves. This guide explains when UK resident trustees may have to pay Capital Gains Tax and how to calculate any tax due.
On this page:
- What is a trust?
- When trusts have to pay Capital Gains Tax
- Trusts, the 'Annual Exempt Amount' and calculating tax
- Getting help with trusts from HM Revenue & Customs
- More useful links
What is a trust?
A trust is a way of holding assets - such as land, money, shares or even antiques - for the benefit of one or more ‘beneficiaries’. ‘Trustees’ are the legal owners of trusts and in certain circumstances make decisions about how the assets in the trust are to be used.
Trustees act in accordance with the terms of the trust. These are set out by the person who has put assets into the trust. This person is known as the ‘settlor’.
Find out more about trusts and how they work
When trusts have to pay Capital Gains Tax
There are different occasions when a trust may generate a Capital Gains Tax charge. The trustees have to pay the Capital Gains Tax due.
Find out when a trust pays Capital Gains Tax and who pays in the introductory
guide to trusts and Capital Gains Tax.
Introduction to trusts and Capital Gains
Tax
Trusts, the 'Annual Exempt Amount' and calculating tax
The annual tax-free amount (known as the ‘Annual Exempt Amount’) for most trusts is half the amount for individuals (£9,600 divided by 2 = £4,800 for 2008-09). But if the beneficiary is mentally disabled or receiving the middle or higher rate of Attendance Allowance or Disability Living Allowance, the trust gets the same Annual Exempt Amount as individuals (£9,600 for 2008-09).
When calculating your tax, the rules about Capital Gains Tax for trusts are similar to those for individuals. But there are a few small differences.
How to calculate Capital Gains Tax for trusts
Read more about financial support for disabled people on the Directgov website (Opens new window)
Getting help with trusts from HM Revenue & Customs
If you have a Capital Gains Tax query on a trust and can’t find what you need online, you can contact HM Revenue & Customs (HMRC). However, please bear in mind that HMRC won’t be able to answer general tax planning queries.
Contacting HMRC for help with tax on trusts
