Application of PPRR to residence which is shared between trust and individuals

Trusts Discussion
1

I am dealing with a trust of a share of the family home, where I am considering to what extent PPRR will apply, and would be grateful for any thoughts.

Background:
Husband owns 100% of the family home. On his death, his will leaves:
-50% to his wife (W)
-25% to son (S)
-25% to daughter (D)

D&W continue to live in the property, S lives elsewhere.

In 2013, there were concerns about the W signing away her share of the property to an undesirable individual, and it was put into a RPT with life interest for the W until her death, then a discretionary trust on her death; one share for S and family, one share for D and family, but with scope to add beneficiaries.

W has now died.

S&D are trustees as well as potential beneficiaries. D is still living in the property.

They are considering giving D a life interest in both her and S’s shares, in order to give her additional security of tenure and also so that PPRR can apply to the trust shares.

I believe this will work (but interested to hear any comments!) but am I correct to understand that PPRR cannot apply to the 25% share that S has owned outright, given that he hasn’t lived in the house during his period of ownership?

2

PPRR is available on a disposal by an individual who has occupied the property as his/her main residence; lack of residence precludes PPRR for that individual. TCGA 1992 s222 provides:
"(1)This section applies to a gain accruing to an individual so far as attributable to the disposal of, or of an interest in—
(a) a dwelling-house or part of a dwelling-house which is, or has at any time in his period of ownership been, his only or main residence, or

TCGA 1992 s225 allows PPRR on a disposal by trustees where one or more beneficiaries are entitled to occupy the property under the settlement.

Malcolm Finney