I have clients who wishes to set up a life interest in their wills the husband and wife with the gift of land to children. The slight wrinkle about this is that some of the land is agricultural and generates a rent. In the fairly new subscriber so I don’t know if this has been covered before but there’s any body have any thoughts as to whether setting up such a trust for an income producing asset has any drawbacks
Provided that the income from the land is paid direct to the surviving spouse as Life tenant rather than the Trust then it doesn’t complicate matters as the Trust won’t have to complete a tax return, if the income is paid to the Trustees who then pay it on to the spouse then they will need to report and pay the Income Tax on it through self assessment. Is that what you were asking?
Thank you very helpful
A better option may be using discretionary trusts rather than life interest trusts