I am advising in respect of a 2014 self-settlement created by husband and wife in respect of their family home. They had the right to occupy during their lifetimes, the surviving spouse died a couple of years ago. The trust continued after the death, and we are now looking to wind up the trust. On the disposal, we will claim main residence relief in respect of the settlors’ period of occupation, can I check if the 9 month period of grace is available after the death of the second spouse?
The short answer is Yes.
The long answer is that:
1 s.225 (1) TCGA extends PPRR to trustees if an individual (subsection(2)(a)) has been entitled to occupy under the terms of the settlement during the trustees’ period of ownership.
2 s.223(1) and (2)(a) in effect treat the last 9 months of the relevant period of ownership of the trustees as a period in which the property was the individual’s only or main residence whether it was or not.
This assumes no tax non-residence complications under s.222B
Jack Harper