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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Bare trusts: main principles and effects: allowable expenditure

In the case of a bare trust, when an asset is disposed of, care needs to be taken in determining the amount of the allowable expenditure. It may include whichever of the following is appropriate.

  • The value on the death of the previous owner.
  • The value on the date on which the beneficiary became absolutely entitled to the asset.
  • The actual cost to the trustees, or
  • the actual cost to the beneficiary of the asset where it has been transferred subsequently to bare trustees.