Some 12 years ago my wife and I returned from residence overseas. Our two daughters, both financially comfortable professionals purchased a property for our use and we have resided there at no cost since our return. The property is registered at H M land Registry in our daughter’s names.
As an afterthought our daughter’s solicitor at the time of the purchase drew up a Trust Deed which named my wife and me as the beneficial owners of the property. The motivation was to ensure that irrespective of whatever might befall our daughters (divorce, death or whatever) we as their parents would be able to remain in the property as the beneficial owners of the property.
We have reached an advanced age where it is necessary that we move into a flat and sell the home our daughter’s purchased. Prior to initiating the sale we are all concerned at the possible liability for capital gains tax, as the value of the property has increased by around £100,000.
If it can be argued that the trust deed makes the property ours and that it is therefore our primary home, there should be no capital gains tax to pay, but if the land registry registration of the legal ownership means that it is our daughter’s property, then they would presumably be liable for CGT.
Our daughters are not opposed to the notion of the proceeds of the sale being paid to us as beneficial owners rather than to them as legal owners. Nor are they opposed to our using the proceeds to buy a flat in our names. There is an assumption that in the fullness of time they would inherit the property and indeed that would be our intention.
Is there a sound case, on the basis of the trust deed, to proceed on the basis that as beneficial owners the property is our primary home and therefore exempt from CGT.
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