Property inherited with income rights restricted
My client, husband and wife, recently inherited 4 let properties from the husbands late uncle
A deed of variation was exercised so the income from these let properties is paid to the widow for the reminder of her life, net of any taxes and expenses
My question is, who is assessable on the rental income?
I suspect what has happened is the property is now held in trust, being a type of Immediate Post Death Interest trust. So for IHT the property will form part of the widows estate as Settled Property coming to my clients as remainder men on her death (and should have therefore been an exempt legacy to spouse in the deceased's estate - I do not know if this was the case). The income will be assessed on the husband and wife as trustees at basic rate producing an R185. On the widows death, the assets will receive an uplift to the then current market value for CGT. Would anyone agree this view is correct?
If this is the case, would you agree I could suggest the income continues to be paid directly to the widow to avoid the requirement to complete a trust Self Assessment Tax Return. Then as the income is not received by the trustees (i.e. my clients) they cannot then be assessed on it as trustees thus eliminating the requirement to complete a trustees tax return.
There is not a trust deed - unless the Will and DOV could be regarded as such?
Or ... am I overcomplicating the position and the income should simply be assessed on my clients personally who will then pay the rents after expenses and tax to the widow as well as them already owning the property for IHT and CGT.
Thanking you in advance for any responses
- Director self assessment 79 6
- Donaldson v HMRC - result?? 375 6
- Supply to Irish State Body 231 3
- at wits end 1,573 40
- Have I made a mistake... 508 4
- Wear & Tear Allowances 334 8
- Which address 100 6
- Directors and unemployment benefit 118 9
- Tax relief for Director incurring business expenses on his credit card 240 3
- How to tell HMRC Limited Co. is active 283 6
- What should the partnership dissolution look like, and what is accounting treatment for goodwill? 53 3
- That old chestnut 445 8
- Loss on cessation of sole trade 155 2
- Free Agent - Payments on Account 362 8
- Investment property where tenant lives rent free 238 5
- MAAT vs ACCA 2,003 36
- And they want HMRC to take money from bank accounts! 829 17
- Helping clients with bookkeeping but not a bookkeeper 780 19
- Letter from HMRC telling me client passed away 1,467 20
- PAYE Refund Farce At HMRC 363 3
- DTR : TIOPA 2010 Section 42 408
- CTA study material 363
- Sect 102 TMA 1970 271
- Sage Forecasting - Print filename 253
- new capital structure ltd with investors 205
- Pre incorp expenses 202
- Relief on French Tax Deposit? 201
- Anyone have clients that use Pay4Later to offer customers credit? 182
- Slight twist on employment related securities 174
- Accommodation provided to employees for short term contract away from home 159