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Where Taxpayers and Advisers Meet

Inheritance Tax if spouse allowed to live in house for 6 months?

Joined:Wed Aug 06, 2008 3:30 pm

Postby djaneyc » Fri Oct 28, 2005 5:09 am

I am the residuary beneficiary, and the person who died left a surviving spouse. In the will, it states the spouse is allowed to live in the property for six months rent free. I have been told that the property will not therefore be valued as part of the estate for inheritance tax purposes? Is this correct?

Joined:Wed Aug 06, 2008 3:14 pm

Postby bob.fraser@towrylaw. » Sun Oct 30, 2005 9:33 am

So the implication is that the house has been left in trust. Can you amplify what type of trust this was?
What happens to the spouse at the end of the 6 months?
I suspect that an interest in possession trust has been created, which is then severed, which would have the effect that you describe IF the surviving spouse lives a further 7 years. But you would need to provide more details for certainty to exist.

Joined:Wed Aug 06, 2008 3:30 pm

Postby djaneyc » Mon Oct 31, 2005 1:17 am

As far as I know there is no trust...all I can say to clarify is that the will states that the spouse can live free of rent in the house for six months. The plan is that the spouse will move into a property purchased by the executors to reside in until the end of their days. On death the property will go back into the estate to the residuary beneficiary.

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