PPR and Discretionary Trusts

[neildeans]

House owned by umarried couple as tenants in common. They transfer house into discretionary trust during their lifetime. The continue to live in it. Each settlement (2 halves) are below IHT nil rate band.

Trust set up to deal with conditions of tenancy on death not for IHT planning purposes.

My questions:-
1) will trustees get PPR if house sold during settlors lifetime
2) on first death the survivor remains in house. will PPR apply on whole of house if they then sell.
3) will PPR apply on death of survivor if trustees sell or pass to other beneficiaries.
4) is there any need to setup 2 trusts to deal separately with the 2 half shares in the house

Many thanks

[Lee Young]

There may well be other views, but these are mine:

1) case law suggests yes.
2) again case law suggests yes, assuming the survivor has the "right" ubnder the trust to occupy the whole.
3) no - gain up to death of survivor MAY have been wiped away depending on a careful analysis of the situation at that point.
4) possibly may have been, but too late now anyway?