I have a client who has willed his properties (including a mixed use property - top floor a BTL and ground floor a commercial shop - both currently let to separate parties) to his spouse under a Life Interest Trust created in the will with the spouse being the Life Tenant.
The income of the trust will be paid to the life tenant for the trust period.
In respect of the mixed use property (mortgage free) there are separate agreements i.e. BTL tenancy agreement with the current tenant and a 10 year lease with the current occupant of the commercial premises. The value of the commercial part of the property is £500K.
Will it be possible to separate the mixed use property by amending the will to state that the BTL part is attributed to the Life Tenant and a separate trust then be set up for the lineal descendants to benefit from the commercial part of the property?
(If this property is put in a separate trust then we are able to bring the net value of the estate to below £1M (taking into account IHT NRB and TRNRB)
Note: mixed use property is 100% owned by the client (an individual). The commercial part was used in the past as commercial shop run by the owner but in the past 5 years has been leased to other parties ( unfortunately BPR and /or BADR not available as commercial part being used solely for investment purpose)
Many thanks in advance,