Settlor interested trust and CGT

Settlor interested trust and CGT

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Husband died in 2010 and left his half share of the main home on discretionary trust. Wife then settled her half share on a life interest trust in 2011 with herself and two adult children as beneficiaries; I believe the motive was care home fees planning. Wife then went into a care home in 2013 and the property was let, with half the rents assessed on the discretionary trust and the other half assessed on the her direct.

Wife died in March this year and the beneficiaries are considering transferring the property into their joint names and have asked about CGT if the property is sold.

For the discretionary trust I believe we should be transferring the property out with a hold over election so they take over the probate value in 2010. Alternatively it could be assessed on the trustees, the beneficiaries would then take over the value at the date of transfer as their half share of the base cost.

I am not sure of the other half share however due to the settlor interest. As a post 22/3/2006 life interest trust is the position the same as the discretionary trust half share above, albeit using the 2011 value instead? Or does the settlor interest or life interest change anything? No holdover election was made on the transfer into the life interest trust, presumably due to PPR relief.

Many thanks in advance for any clarification.

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