Discretionary trust - selling house

seh567

I have received advice on this forum and after discussions with solicitor I am keeping my late husbands 1/2 share of the marital home in a Discretionary Trust. Trustees & beneficiaries are myself & 2 sons.

I wonder if anyone has any thoughts on this please:-

Solicitor has confirmed that in the event that I no longer require living in the property (downsizing to a flat) it would be sold and my late husbands share would fall into the trust. The trustees could then make a decision as to whether to continue the trust or close the trust down and distribute the proceeds between one or more of the class of discretionary beneficiares detailed in the will. (myself, 2 sons, grandchildren). This would be great because I could then make sure it was distributed in my lifetime.

Seems to be too good to be true so correct me if I am wrong but I thought that we would have to keep my husbands share in trust until I passed away and my share of the proceeds of the house would pay for the flat.

I know I could ask the solicitor to clarify but I dont want to appear silly and I have had a lot of advice from them so far without incurring any costs. They also confirmed that there is no tax implication upon the house whilst I am still living there and that when sold the trustees could claim principal private residence relief for Capital gains tax. The only thing that needs to be done now for the future is to transfer my late husbands share into the names of the trustees for land registry purposes.

getmore4less

[STRIKE]That CGT exemption does not sound right.

The relief applies to life interest(Interest in possession trusts).[/STRIKE]

Edit: a bit of checking and it seems maybe it can apply in these type of cases.
this seems to cover it. co owned property.
http://www.hmrc.gov.uk/manuals/cgmanual/cg65407.htm

getmore4less

Disolving the trust can happen at any time just need to check for exit taxes.

SeniorSam

No problem disolving the Trust if all Trustees are in agreement. However, Trust's can be very useful for you or your sons, since retaining capital in Trust means it has not entered into estate of the benficiary and the beneficiary can pass that on to others at DISCRETION of the Trustees.

That one Discretionary Trust can be split into two or three, even more if needed, as long as each Trust has at lease 2 Trustees, If the capital does not generate an 'income', but only 'growth' then it will not be taxed, but any Trust can be drawn upon at any time with Trustees approval.

Don't just rule it out, as it may be beneficial so one or all of your children. If grandchildren are still minors, then their share needs to remain in trust.

I hope this has not confused you too much.

Sam

Yorkshireman99

seh567 wrote: »

I have received advice on this forum and after discussions with solicitor I am keeping my late husbands 1/2 share of the marital home in a Discretionary Trust. Trustees & beneficiaries are myself & 2 sons.

I wonder if anyone has any thoughts on this please:-

Solicitor has confirmed that in the event that I no longer require living in the property (downsizing to a flat) it would be sold and my late husbands share would fall into the trust. The trustees could then make a decision as to whether to continue the trust or close the trust down and distribute the proceeds between one or more of the class of discretionary beneficiares detailed in the will. (myself, 2 sons, grandchildren). This would be great because I could then make sure it was distributed in my lifetime.

Seems to be too good to be true so correct me if I am wrong but I thought that we would have to keep my husbands share in trust until I passed away and my share of the proceeds of the house would pay for the flat.

I know I could ask the solicitor to clarify but I dont want to appear silly and I have had a lot of advice from them so far without incurring any costs. They also confirmed that there is no tax implication upon the house whilst I am still living there and that when sold the trustees could claim principal private residence relief for Capital gains tax. The only thing that needs to be done now for the future is to transfer my late husbands share into the names of the trustees for land registry purposes.

Don't be embarassed to ask the solicitor to clarify. They work for you and any good solicitor should be pleased to do this.

Savvy_Sue

Yorkshireman99 wrote: »

Don't be embarassed to ask the solicitor to clarify. They work for you and any good solicitor should be pleased to do this.

Plus one way or another you'll pay for their advice, so it would be money well spent to understand it!

weezie7

SeniorSam - is it up to the Trustees, or beneficiaries, to decide if the Trust can be wound up, as long as they all agree?


Am in a similar position and have been read that if all beneficiaries agree, Trust can be wound up?