There will be two disposals here for capital gains tax purposes that we need to consider.
Firstly, your client’s individual disposal. If he has always occupied this property as his main residence for the full period of ownership, subject to the last 9 months of ownership, then the capital gain would be covered by principle private residence relief – s222 TCGA 1992. Therefore, no capital gains tax would be due and in addition there would be no need to submit an online property account for residential disposals within 60 days if no liability has arisen here – paragraph 4 Sch. 2 FA2019
Secondly, the trustees would have a disposal that needs to be considered. The trustees could also claim principle private residence relief if they meet the conditions in s225 TCGA 1992. During the period of ownership of the trustees, the property must be occupied as the only or main residence of a person entitled to occupy it under the terms of the settlement which would appear to be the case in your client’s situation. HMRC summarises these conditions at CG65400. If these conditions are met, then the relief would be calculated in the same way that it would for individuals.
However, the Trustees must make a claim for principle private residence relief under s225 TCGA 1992. This is also confirmed in CG65440. If the Trustees are already within self-assessment, they can make a claim via their SA Tax Return but if they are not then they could complete a voluntary online CGT report under Sch. 2 FA 2019. For the online CGT report the trust must first be registered under the trust registration service – “If you’re reporting as a trustee of a registered trust, you’ll need the trust’s registration number or unique tax reference.” https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax
There is also more guidance available here under “Reporting for Trusts” – ATT Guidance
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