Property in Trust

CheskaBB
CheskaBB Posts: 3 Newbie
First Anniversary Combo Breaker
in Deaths, funerals & probate
Don’t know if anyone can help & sorry if it’s been asked before but I couldn’t find anything.
When my aunt passed away 20 years ago, she left her flat in trust that my uncle could live in it for the rest of his life.
He has recently passed away & I will be due to inherit but I’ve read some stuff that I or the trust may have to pay tax on the property.
It’s well below the inheritance tax threshold but I’m worried I may have to pay Capital Gains Tax on what it made over that 20 years (approx £100k). I appreciate if I inherited it, held on to it for that time myself, not living in it, I would pay the CGT but not sure about this circumstance?
I’m not planning to live in it, or do it up. I would just tidy it & sell asap
I’m going to see a solicitor soon but would like some idea before I go.
TIA

Comments

  • Yorkshireman99
    Yorkshireman99 Posts: 5,470 Forumite
    CheskaBB wrote: »
    Don’t know if anyone can help & sorry if it’s been asked before but I couldn’t find anything.
    When my aunt passed away 20 years ago, she left her flat in trust that my uncle could live in it for the rest of his life.
    He has recently passed away & I will be due to inherit but I’ve read some stuff that I or the trust may have to pay tax on the property.
    It’s well below the inheritance tax threshold but I’m worried I may have to pay Capital Gains Tax on what it made over that 20 years (approx £100k). I appreciate if I inherited it, held on to it for that time myself, not living in it, I would pay the CGT but not sure about this circumstance?
    I’m not planning to live in it, or do it up. I would just tidy it & sell asap
    I’m going to see a solicitor soon but would like some idea before I go.
    TIA
    CGT should not be charged except on any gain from when you aquite it and sell it. You are not AFAIK responsible for any gain whilst it belonged to thr trust. Nevertheless it would be best to get professional advice.
  • badger09
    badger09 Posts: 11,205 Forumite
    First Post First Anniversary Name Dropper
    CheskaBB wrote: »
    Don’t know if anyone can help & sorry if it’s been asked before but I couldn’t find anything.
    When my aunt passed away 20 years ago, she left her flat in trust that my uncle could live in it for the rest of his life.
    He has recently passed away & I will be due to inherit but I’ve read some stuff that I or the trust may have to pay tax on the property.
    It’s well below the inheritance tax threshold but I’m worried I may have to pay Capital Gains Tax on what it made over that 20 years (approx £100k). I appreciate if I inherited it, held on to it for that time myself, not living in it, I would pay the CGT but not sure about this circumstance?
    I’m not planning to live in it, or do it up. I would just tidy it & sell asap
    I’m going to see a solicitor soon but would like some idea before I go.
    TIA

    I don't think you've given enough info:o

    Who was Executor of your aunt's will?
    Who were the Trustees?
    What exactly did the Trust say?
    Do you inherit the property, or will it be sold and you receive the proceeds?
    Who is the Executor of your uncle's will?
  • Dox
    Dox Posts: 3,116 Forumite
    First Anniversary Name Dropper First Post
    CheskaBB wrote: »
    I’m going to see a solicitor soon but would like some idea before I go.

    Idea of what? That's exactly why you are going to see a professional, who will have all the facts and thus be able to advise you accurately.
  • SeniorSam
    SeniorSam Posts: 1,670 Forumite
    First Post First Anniversary Combo Breaker
    As this is a Trust matter, it's important that you see a STEP qualified solicitor, rather than just any solicitor, to ensure that you obtain correct information. STEP qualified solicitors have qualified in Trust matters but many solicitors are not up to date, so do be careful.

    This is most probably an Interest in Possession Trust, that had a lifetime interest for your Uncle and then to be passed on to the beneficiaries, either directly, or by selling the assets and distributing the proceeds to the beneficiaries. The Will should make your Aunts wishes clear.
    I'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, but my comments here and on Legal Beagles as Sam101 are just meant to be helpful. Do ask questions from the Members who are here to help.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    edited 25 April 2019 at 7:36AM
    CheskaBB wrote: »
    Don’t know if anyone can help & sorry if it’s been asked before but I couldn’t find anything.
    When my aunt passed away 20 years ago, she left her flat in trust that my uncle could live in it for the rest of his life.
    He has recently passed away & I will be due to inherit but I’ve read some stuff that I or the trust may have to pay tax on the property.
    It’s well below the inheritance tax threshold but I’m worried I may have to pay Capital Gains Tax on what it made over that 20 years (approx £100k). I appreciate if I inherited it, held on to it for that time myself, not living in it, I would pay the CGT but not sure about this circumstance?
    I’m not planning to live in it, or do it up. I would just tidy it & sell asap
    I’m going to see a solicitor soon but would like some idea before I go.
    TIA

    If that created an Interest in possession trust(life interest trust) then tax situation changed on these type of trust in 2006 the pre 2006 rules will apply

    Was the uncle resident in the flat then it should qualify for full Private Residence Relief(PRR)


    the executor of the uncles estate and the trustees of the trust should deal with this.

    to get a background and and a basis uncerstanding of the terms use google is your friend -

    interest in possession trust
    add IHT or CGT for more focused results.

    also known as "life interest trust"
    the 2006 change crested what is now know as IPDI trusts so if you see reference to those they are post 2006

    to get you started
    https://www.gov.uk/trusts-taxes/trusts-and-capital-gains-tax
    https://www.gov.uk/government/publications/trusts-and-capital-gains-tax-hs294-self-assessment-helpsheet/vdsv#what-happens-when-the-life-tenant-dies
  • Yorkshireman99
    Yorkshireman99 Posts: 5,470 Forumite
    Dox wrote: »
    Idea of what? That's exactly why you are going to see a professional, who will have all the facts and thus be able to advise you accurately.

    Because it might help and save money. The OP will be better prepared for the meeting
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