I am acting for Trustees of a discretionary will trust which own a share of a property which is occupied by the surviving spouse, one of the beneficiaries of the trust. They are now looking to sell the property.
We have been looking into whether the Trustees can claim PPR for the Trust’s share of the property based on the spouse’s occupation. There is no express power for the Trustees to allow a beneficiary to occupy the property; however the CGT manual (link - https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg65407) states that it is possible to imply a power where it is clear this was the settlor’s intentions. In this case we have a letter of wishes which clearly sets out that the surviving spouse is to live in the house and use it as her main residence as long as she wishes to. We cannot find any case law on this point.
Has anyone dealt with such a case and successfully argued an implied power with HMRC or knows of a case on this issue?