A client's father has died and there is a Trust in which my client and her two siblings own 50% of the house in which their step mother lives, of which she owns the other 50%. The stepmother is entitled to live there and, when she dies her share will go to her sons and the house can be sold. Repairs and maintenance are shared jointly.
The step mother wishes to remodel the house and my client and her siblings are not keen on the idea of having to make joint decisions about all the repairs and maintenance so the step mother's two sons have offered to by my client and her siblings out.
First question - does this give rise to a CGT or IHT from the setting up of the Trust when the father died?
The solicitor has raised a point about "life interest value". The probate value was £517K and my client and her siblings will receive £200K so
Second question - how is the life interest value calculated for CGT purposes?