I am dealing with a case where the deceased owned a 1/2 share of his home and the other half was owned by his daughter who resided with him.
Under the terms of his Will he gave his daughter a life interest in his share. It is coming up to the second anniversary of his death and his daughter now wants to execute a deed of variation under which she will give up her life interest with the result that the remainder beneficiaries, which include exempt and nonexempt beneficiaries, will become entitled to share in the proceeds of sale as the property is to be sold by the daughter and the trustees, of which she is one, as the property has already been vested in them. The DOV will contain a provision to the effect that the clause in the Will giving the life interest shall be replaced with a clause giving the share in the property to the remainder beneficiaries.
Whilst I do not know whether the sale will result in a capital gain, which will be liable to tax, if it does and the sale takes place before the DOV is executed, principal private residence exemption would presumably apply. However what is the position if the sale took place after the deed is executed?