We identify and investigate known late M, L, and T dwarfs in the Gaia second data release. This sample is being used as a training set in the Gaia data processing chain of the ultracool dwarfs work package. We find 695 objects in the optical spectral range M8-T6 with accurate Gaia coordinates, proper motions, and parallaxes which we combine with published spectral types and photometry from large area optical and infrared sky surveys. We find that 100 objects are in 47 multiple systems, of which 27 systems are published and 20 are new. These will be useful benchmark systems and we discuss the requirements to produce a complete catalogue of multiple systems with an ultracool dwarf component. We examine the magnitudes in the Gaia passbands and find that the GBP magnitudes are unreliable and should not be used for these objects. We examine progressively redder colour-magnitude diagrams and see a notable increase in the main-sequence scatter and a bivariate main sequence for old and young objects. We provide an absolute magnitude-spectral subtype calibration for G and G_RP_ passbands along with linear fits over the range M8-L8 for other passbands.

Cone search capability for table J/MNRAS/485/4423/table1 (Input catalogue entries with multiple Gaia DR2 matches within 20 arcsec)

Cone search capability for table J/MNRAS/485/4423/table2 (Intrinsically bright (M_G_5.0 arcsec sorted by separation (bottom))

Cone search capability for table J/MNRAS/485/4423/table3 (Data for Ultra-Cool Dwarfs in Gaia DR2)

Cone search capability for table J/MNRAS/485/4423/table5 (New candidate binary systems containing LT dwarfs, identified in Gaia DR2)

Cone search capability for table J/MNRAS/485/4423/table6 (J1711+5430 and NLTT 44368 Gaia DR2 parameters)