A Will provides a right for a beneficiary to occupy a property and when the beneficiary ceases to reside the trust created comes to an end. Do forum members agree that the beneficiary voluntarily ceasing to occupy will effectively be a PET in the same way as the release of a Life Interest?
Justin Wallace
Brewer Harding & Rowe
Yes, and a cgt disposal, presumably covered by pprr
Simon Northcott
Yes it would be a PET by the occupying tenant if they cease to reside.
Lynsey Bashforth
Bashforth Young Solicitor
Whilst not contradicting the clear and correct statements before, it might still be worth checking whether the “right to occupy” arose in equity as part of the will trust, which it most likely did, in other words as part of a settlement; or whether it took effect as a legal right at law such as a licence. If the latter then might there be a different outcome depending on the analysis and the facts?
Peter Harris
Overseas Chambers
Provided that the Beneficiary’s right of occupation vested before 22
March 2006 or, if after, is a transitional serial interest (TSI) an
immediate post-death interest (IPDI), or a qualifying trust for the
disabled, termination of their interest will be a PET.
If not within the above, an exit charge may arise on termination.
Paul Saunders
Is not the position different if the beneficiary renounces the right to reside in the property by deed of variation - of course within two years of the Testator’s death - moreover even if he/she continues to reside in it by licence from those entitled in remainder?
R.H.FOSTER