Test your understanding
(1). State whether the following statements are true or false.
A There is no CGT on the creation of a trust with an immediate post-death interest.
B On the transfer of a painting to a trust gifts hold-over relief will only be available if the transfer results in an IHT liability.
(2). Gerard is the life tenant of a trust with an immediate post-death interest. The trust was created on the death of his wife. The trust assets consist of four rental properties. Gerard’s children are the remaindermen of the trust.
(i) Explain how the income arising in respect of the rental properties will be subject to income tax.
(ii) Explain how IHT will be calculated in respect of the trust assets on the death of Gerard.