OP means Original Posthttps://trustsdiscussionforum.co.uk/t/forum-guidelines/16994
While it is strategically sound to transfer your own property elsewhere at a time when your state of health is not such as to be at credible risk of care fees, so that a local authority will have an uphill future task in arguing “deprivation” successfully, it is most crass to leave lying around cogent contemporaneous evidence of your motivation in the shape of your responding to marketing material claiming that it achieves that very objective. Billy Bunter often strenously denied eating a fellow’s pupil’s cake sent from home while his face was covered in the remains thereof.
At peril of dignifying the scheme with a technical analysis:
1 It is A CLT and a GROB
2 s226A disapplies PPRR on a later disposal of the house by the trustees and there will be no CGT-free uplift on death unless the trust despite being a RPT for IHT gives someone an interest in possession s73 will not operate on a death
3 It is not easy to separate out the future growth in value of an asset.
“This is done through a clause in the trust deed that splits beneficial ownership of growth (i.e. gains) and original value.” Yeah, right !!! It would need to stand a challenge from the law and also the GAAR.
As an arch-exponent of the pre-2013 remittance rules the best one could achieve was to put the sale proceeds of an asset sold at a gain into a separate bank account to avoid mixing so that one could remit funds out of it, if at all, at least knowing the worst downside: HMRC would treat the gain as remitted first. It was impossible to put a part of the sale proceeds representing gain alone into a separate account and not remit it at all. Whereas one could put income from an asset into a separate account because it is juridically separate from the underlying asset.
As a maestro of alphabet share arrangements one can only stream ownership of the future growth in value of a company separately by creating a separate class of share with appropriate rights: that is, an entirely discrete separate asset.
You can fragment the the property rights, e.g. into a leasehold interest and a freehold reversion subject to s102A FA 1986 but it is hard to do that and ensure that one asset will always be equal to current freehold value. The only other way to do this with a property is to give someone other than the owner an option to acquire it at its current value and the legislature is across this in the shape of ss17 and 18 TCGA and s163 IHTA. It can work for options between spouses.
So I ask the question that might have been put to Abraham Lincoln after his assassination at the theatre: “apart from that Mr President, how did you enjoy the play?”
Jack Harper