Farm planning within Will

Trusts Discussion
1

Good evening,

I have H & W who hold a farm including farm house as beneficial joint tenants, no partnership agreement etc. H actively farms and W is retired. Both wish for the farm to pass to daughter but not during lifetime. The farm will pass via survivorship as it stands on the first death.

I am happy H would achieve APR. In the absence of lifetime gifts I can only see severance of the JT and the disposal of the half share on the first death as a way of obtaining APR. (if H passes first). APR would be denied for W as she is retired but given the low value of the farm I would hope RNRB would eat into her half share as the farm house would be the bulk.

I am just wondering if anyone can see another way to deal with this? I am not sure if I am thinking too hard about this but I cannot see how APR applied to the whole of the farm due to the JT if H passes first.

Thanks a lot

2

Hello,

Id suggest transfering all the property to H. Spousal exemption no CGT assume no mortgage, no SDLT. Ie W gifts to H.

H can then transfer the whole estate into discretionary trust, this would create an immediate charge to IHT, with APR claimed the tax charge is Nil.

H and W trustee, daughter is beneficiary. H dies W would have control over the trust assets.

Id assume the only issuse is taxation at the trust rates.

It would secure the APR now, allow W a right to reside and pass the assets to the next generation.

Theyre various clawback rules, care should be taken.

Richard