Partition of trust and tax implications

GDB2222

If you want more advice you could post a redacted copy of the actuarial report here, and we can help explain the figures in it.

in very broad terms, the calculations start with step mum’s future life expectancy. For the population as a whole that’s 17 years for a woman of her age. But there’s an argument that she’s in good health currently and better off than many, so may live a couple of years longer. On the other hand, she may need to downsize or go into a care home. So let's stick to 17 years for now.

Looking at this from your perspective, you should expect on average to wait 17 years or so to get your half share in the house. You can expect that to grow in value with house prices generally, but there may be tax to pay when you get it. If you instead get a dollop of cash now, you can invest it and get income as well as capital growth. So, really this all depends on the assumptions the actuary has built into his calculations for house price growth and the investment return. A 1% difference there makes a lot of difference when compounded over 17 years.

You may instead want to spend the cash or give it to your kids, but the actuary can't allow for that. All he can do is compare investing cash now for 17 years with keeping your interest in the house.

Did he say in his report what allowance he made for those factors?  What percentage of the current trust value did he, in fact, allocate to you?

It helps avoid confusion if you distinguish between the value of the whole house and the value of the half that's in the trust, please.