- My client who is cohabiting intends to transfer a mortgage-free property valued at £375 K (inherited value £280K) to a 4yr old only child by creating a trust to pass it to the child at the age of 25 years. From Oct 2018 the property has become his main residence. If the property is rented monthly rent will be around £1300. I would appreciate any advice on below queries. am new in this field.
a) To my understanding, this will be a settler interested trust. If the trustees don’t distribute income to the child till the child reach the age of 18, will the rental income of the trust be treated as settlers income during this period?
b) For calculating periodic charge will it be possible to use 2 NRB of both parents? (i.e; f the client gets married to his partner)
c) GROB/POAT issues, if the client or partner stays in the property during the trust period or after the trust ended?
d) Since no CGT ( no holdover relief) or IT advantageous ( 45% tax on settlor) from discretionary trust any other suitable trust the members can recommend.
Thanks in advance
Apex Estate Planners Ltd.