Question asked:


A died and left 1/3 of estate to wife absolutely + life interest in home. Residue left to family trust with wife having an interest in possession to all income from the 2/3 trust. Interest in possession accepted by Revenue and all trust income returned over the years by wife. A’s will states that everything to be liquidated on wife’s death and distributed to adult children. Trust owns residence, an apartment and securities. My question is – does CGT arise for the trust on the death of wife or is the 2/3 treated the same as wife’s 1/3 as she had an interest in possession. Revenue guidelines appear to indicate that CGT does not arise?
1. If the occasion of a person becoming absolutely entitled is the termination of a life interest (as defined in Tax Instruction 19.3.3 Par. 5) by the death of the person entitled to that interest, there is no charge to Capital Gains Tax on the deemed disposal and there is no allowable loss.
Thanks Jean

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Asked on 13 August 2017 12:15 pm