I agree with Malcolm. I see no reason why s.260 holdover will not apply. Likewise, the date for the disposal will be the transfer into trust not the date of the restriction.
I do not like this type of planning where there are mortgages as you are likely to be in breach of the terms of the mortgage by splitting the legal/beneficial interest. My preference would be to try and free up at least one property (up to the value of £325K or £650K if a married couple assuming the nil rate bands are available) and transfer the property into trust unencumbered.
You may also want to consider not holding over in view of the fact that CGT may be brought into line with income tax in the coming months and/or CGT holdover on death may eventually be scrapped…i.e pay CGT now at the more attractive rate and re-base.
Camilla Bishop
DMH Stallard