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Capital gains tax on a property held in trust

Q: My client has recently informed me that he is trustee for a trust set up some years ago by his father. There is a commercial property in the trust which was originally intended to be let but this never happened. They sold the property in November 2019 and there is a significant capital gain. The trust has never been registered with HMRC. What needs to be done with regard to the tax liability?

A: The trust will have a CGT liability therefore it needs to be registered with HMRC. As the liability arose in 2019/20 the deadline for registering is 5 October 2020. Details of which trusts have to register and when to register can be found here https://www.gov.uk/guidance/register-your-clients-trust.

It is worth noting that the Trust Registration Service now has a micro-service version which replaces the previous facility, and this new version should be used where possible. Agents can now use the service to: