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Symphony(Initiate)Initiate
24 May 2024

I purchased a property as sole trustee of an Estate. I am considering transferring ownership of the property from my name to a private company (to act as the trustee of the Estate.) I would be the sole shareholder. I do not believe this would constitute a change of beneficial owner and thus the transfer would not be a CGT event. Is this correct?


Also, under the Will, I have granted a life interest in the property, so it is the occupant's principal place of residence (rent free). Looking hopefully many years into the future, does this make the property exempt from CGT when sold?

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1,066 views
5 replies

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Most helpful reply

TobyJDodd(Devotee)Registered Tax Professional
24 May 2024

Hi @Symphony


I strongly recommend you obtain legal advice.


Terminology is very important in estate law and your question is all over the place.


Purchasing a property from an estate is totally different from obtaining one via an inheritance.


You can’t just appoint a private company to act as trustee for an estate.


You would need a testamentary trust created by the will.


Transferring to the private company under terms not provided by a will, Is very likely a cgt event


Toby


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Most helpful reply

TobyJDodd(Devotee)Registered Tax Professional
24 May 2024

Hi @Symphony


I strongly recommend you obtain legal advice.


Terminology is very important in estate law and your question is all over the place.


Purchasing a property from an estate is totally different from obtaining one via an inheritance.


You can’t just appoint a private company to act as trustee for an estate.


You would need a testamentary trust created by the will.


Transferring to the private company under terms not provided by a will, Is very likely a cgt event


Toby


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Symphony(Initiate)Initiate
26 May 2024

Thanks @TobyJDodd, apologies I was not clearer. The Will required me as executor to purchase a property, hold it 'upon trust' for the estate and grant a life interest to a beneficiary. (This property was purchased from a third party, not the estate.) To 'futureproof' this arrangement, the estate lawyer's advice now is to consider holding the property 'upon trust' via a private company of which I would be sole shareholder. Would this constitute a change of beneficial owner and thus be a CGT event?


Does the grant of a life interest (principal place of residence for the beneficiary) exempt this property from CGT, regardless of whether there is deemed to be a change in beneficial owner?

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