PET from date of death or from date trust is brought to end?


(Kristen) #1

Wife has died leaving a Right of Occupation of her 50% share of property (held as TIC) to her husband (step-father to other beneficiaries) which ends in two years. For the purposes of IHT, when the trust comes to an end in 2 years, will the PET have been made from the date of death, or from the date the trust came to an end?

Beneficiaries are considering a Deed of Variation, among other things, to give step-father more time in property; however, step-father is 77 and has other children who will need to benefit from his own NRB.

Thanks.

K Woods
Sousa Law


(Paul Saunders) #2

As the husband and deceased held the property as tenants in common in equal shares, following the death of the wife I anticipate the husband is the sole surviving legal owner and, therefore, the sole trustee of the land.

Consideration might be given to removing his right of occupancy under the will and relying upon his own entitlement to remain in occupation. As the sole trustee of land, he will have effective control over the use and occupancy of the property. If the step children wished to oust him, they would need to go to court.

The availability of the wife’s residence nil rate band, and CGT main residence relief, may be important factors influencing the final decision.

Paul Saunders


(Kristen) #3

Just to say that I now have my answer - 7 year clock starts ticking from day trust comes to an end.

K Woods
Sousa Law


(Tim Gibbons) #4

If they wish to extend the husband’s period of occupation a tenancy or occupational licence might be more suitable than a variation of his rights under the will. It wouldn’t necessarily have to be for the full open market rent

Tim Gibbons