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Inheritance Tax pre owned assets/gifts with retain

Inheritance Tax pre owned assets/gifts with retained benefits

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In 2008 my parents split their property retaining the kitchen a bedroom and a bathroom and gifting the remainer of the property to a trust for the benefit of family members. From 2008 to January 2020 the part of the property owned by the trust was largely mothballed, since January 2020 a bedroom in the trust owned part of the property has been occupied by a carer for my parents, I would have thought that a rent ought to be charged for the occupation of a bedroom by a carer which would also establish genuine occupation by the donee, however the solicitor has written as a reason why rent does not need to be charged.

"The trustees may allow a person to reside in the Trust property. The trustees have decided to permit a person who is a carer to reside in the Trust Property"

I would be interested in any comments


Replies (3)

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By stepurhan
06th Mar 2021 20:52

This sounds like a query that requires both legal and accounting advice. There is far too much going on here for an answer on a forum to be remotely reliable.

A good place to start would be asking the solicitor why the trustees have made that decision. The trustees are, by and large, supposed to act for the benefit of the trust. The statement they have given you is that they are allowed to do it and have done it, without providing any sound reason for them to have done so.

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By Tax Dragon
06th Mar 2021 21:26

What happened in 2020 seems to matter only if what happened in 2008 removed the trust part of the property from your parents' estate(s) (and did so without triggering a POAT situation). What level of certainty is there over that? (If it was the same solicitor that advised then that you are quoting now, and you/your parents trusted the original advice, what's happened to make you question the solicitor now?)

However, overall I agree with stepurhan: without sight of the 2008 advice, and without understanding the property split and related transactions, it's tough to say much useful about the 2020 advice.

And, tbh, such is not what this forum is for.

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By Paul Crowley
07th Mar 2021 16:50

We would hope that the legal people do this regularly and know how to deal with any challenge.
If asked by a client I would pass on giving any opinion

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