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Tax on property in trust

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Hello
This is my first time posting on this forum.  I wonder if someone could help. 
25% of my mother's house is in trust to myself (my mother owns 50% and my sister the other 25%).  My mother may  need to go into a care home.  If yes, we will need to sell the house. 
Can anyone advise what would happen regarding any tax implications for myself and my sister.
Thank you

Comments

  • Keep_pedalling
    Keep_pedalling Posts: 20,859 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    Was this trust created by your father’s will? If it was this sounds like an immediate post death interest trust, which would avoid any tax implication for your self or your sister, because although the trust is the legal owner your mother is the beneficial owner. 
  • poseidon1
    poseidon1 Posts: 1,380 Forumite
    1,000 Posts First Anniversary Name Dropper
    Hello
    This is my first time posting on this forum.  I wonder if someone could help. 
    25% of my mother's house is in trust to myself (my mother owns 50% and my sister the other 25%).  My mother may  need to go into a care home.  If yes, we will need to sell the house. 
    Can anyone advise what would happen regarding any tax implications for myself and my sister.
    Thank you
    You say in trust for you and your sister. Did the terms of the trust permit your mother to occupy the house for life and only on her death does it then pass to you both? If so then the entire sale proceeds benefit from your mother's main residence exemption from capital gains tax.

    However, does the trust go on to state that your mother is entitled to income from the trust in the event of a property sale or substantial downsizing? If so the trust now becomes a far more complicated entity for you to manage.

    It should already have  been registered with HMRC, but going forward the trust Income is taxable in the hands of the trustees prior to passing on the net income to your mother.  It would also be desirable for annual trust accounts to be prepared in addition to the annual trust tax return.

    These are tasks, you may no doubt need professional help, so consider employing the services of a Chartered Accountant, experienced in trust compliance matters.
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