Double trust with IOU

[Caro]

Family has one of these double trust estate protection schemes whereby family home is now owned by a trust, by use of an IOU. Previous owner is now in residence and pays POAT on open market rent. Does this trust scheme require the previous owner's principal private residence relief when it comes time to sell the house? I ask as she has a summer residence and is thinking of disposing of it at some point in the near future and it may be best to make PPR election?

[Lee Young]

The scheme does not "require" PPR; it was merely one of the attractions that the arrangements could be put in place whereby PPR would not be lost.

The situation needs to be reviewed in the usual way - perhaps, if it is possible, electing for the other property to be the PPR for a short period will give enough relief to avoid CGT on the disposal there (the last 36 months) without adversely jeopardising the position on the double trust property.