Trusts and GCT

[confused]

Second question
should I set up a Trust if so what type, I have a property which I bought as buy to let some months ago. I would like to use the gain to help my son when he is older he is 14. Can I set up a Trust and have him as beneficiary, what way will GCT work when I come to sell it probably when he is 18 or 19, I am a 40% tax payer. I had read somewhere that I have to pay GCT on the way into or out of a Trust , would I have to pay on the way in if the house is only a few months old. Also I have read that if my son lives in the property as his primary residence it will be tax exempt, is any of this true? :)

[Tax Accountant]

Second question
should I set up a Trust if so what type, I have a property which I bought as buy to let some months ago. I would like to use the gain to help my son when he is older he is 14. Can I set up a Trust and have him as beneficiary, what way will GCT work when I come to sell it probably when he is 18 or 19, I am a 40% tax payer. I had read somewhere that I have to pay GCT on the way into or out of a Trust , would I have to pay on the way in if the house is only a few months old. Also I have read that if my son lives in the property as his primary residence it will be tax exempt, is any of this true? :)

Trust is a serious subject for which you really need professional advice.

Generally, you will be deemed to have sold the property at the open market value if you transfer it to a connected person or a trust. If you only bought the property recently, there is unlikely to be much gain, if any. CGT is only charged on chargeable gains after all allowances and exemptions. You are allowed annual exemption of £8,500 if this is not used up against any other gains.

How can your son live in the property as his only or main residence if he is only 14?

Ramnik

[johnj]

If you wait until he can live in it as his principal private residence it remains possible to get it into a trust tax free and then after he has lived in it sold free of capital gains tax and you will then have the gross proceeds available in the trust to use for his education costs or new house for him or to rent to others.

[confused]

Thankyou both for you reply , I had meant when he is 18 to live in it, John are you saying it is best to wait untill he is 18 then set up a Trust with holdover election, I have also heard that ther are recent changes where you can't do holdover election and then primary residence, do you know if this is trus, if he didn't do primary residence what % would GCT be when I sell around his 19th birthday probably a student :)