I would be grateful for any advice on the following:
My father died in 2008 and his half of the family home went in to discretionary trust.
I understand the trust is an express trust and that the trust is settled.
However, the definition of settled is not completely clear to me. My understanding of the definition is ' with a Settled Property any income is payable at the discretion of the trustees'. In the case of our trust there is no income.
The trustees are my mother and the three siblings.
The beneficiaries of the trust are the three siblings.
Our mother still lives in the house & continues to own the other 50%. She does not pay any 'rent' on the 50% of the house that is in trust.
Due to potential IHT she is buying the 50% that is held in trust. We will then disperse the funds between the three siblings and dissolve the trust.
There are no other assets in the trust.
The total gain on the property is approx. £200k since 2008 i.e. the 50% in trust has gained £100k.
Now for the question - is the property eligible for private residence relief? If so, can you please advise the procedure for claiming this?
If it is not eligible, would we then have to apportion the gain in our respective tax returns under CGT? Or do the trustees need to settle the CGT before the monies are dispersed?
Thank you for any help.
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