Holdover Gift Trust

What is it?

• A trust used for inheritance tax planning

• Allows assets which are laden with gain to be transferred into the trust without triggering a Capital Gains Tax charge

• It is important to note that Capital Gains Tax is payable on a disposal (transfer or sale) not just a sale! See Capital Gains Tax.

• This does not remove or reduce the Capital Gains Tax liability, it simply defers it until a later disposal (transfer of sale!)

• Falls under the relevant property regime

Most Common Uses

• To gift rental a property laden with gain where the donor (person making the gift) does not have any requirement for the income moving forward

• Income produced by the property is then commonly appointed and mandated out of the trust to adult children / grandchildren, see dealing with income.