I’m dealing with a trust which was set up in 2002. The settlor transferred a 30% share of her property into this discretionary trust (the value was equal to the nil rate band at the time). The settlor continued living in the property and paid the pre-owned assets tax (this as been accepted by HMRC). She died in 2017 and left the other 70% of the property into the 2002 trust. The property has now been sold and this has given rise to a number of queries:
Is there any PPR on the share of the property which is in the trust? There is a substantial gain between 2002 and now. The settlor was not entitled to occupy the property under the terms of the trust.
Is the settlor’s share of the property treated as being added to the trust at the date of death (IHTA 1984, s83) and thus there is no administration period (there are no other assets)?
Does the trust still only have one nil rate band whilst if a new trust has been created in the Will there would be an additional nil rate band?
Any guidance would be much appreciated.