CGT on Life trust

Client placed property into trust in 2012 lived in the property until three years before his death in 2021 when he lived in sheltered accommodation and rented the property out pay for his care. Income was relayed to HMRC and he paid tax on the income.
Question is upon the sale of the property will the estate be eligible for CGT relief through private residency allowance ??
many thanks

Sounds like the property is held in a post 2006 life interest trust. as such the property will not be within the estate for CGT purposes but in the trust.

The trustees should be able to claim Relief under s225 TCGA (assuming all conditions met) for the periods when it was occupied as the main residence and for the final period which can be extended to 36 months.

You will also need to consider the terms of the trust as if it came to and on the death of the settlor/life tenant the gain will have already arisen because of the deemed disposal at that point.

Thank you very much for the information

Just in relation to Nigel’s last point, as this is a post 2006 trust, and presumably therefore not a qualifying interest in possession trust, there will be no CGT uplift on the death of the life tenant.

There will not have been a deemed disposal on the death of the life tenant. It is a relevant property trust for iht and will not have a cgt uplift on the death. The property simply continues on as a trust asset. However there appears to be a gift with reservation of benefit for iht which needs to be returned on the death of the life tenant

Simon Northcott

Trust was drafted on 2012 not post 2006

Ante (before) Post (after)!

Patrick Moroney

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