29
Sep
2016
A question about : Dad past on, trusts and taxes?
My friends Dad recently died, the old chap had lived in a house which was in a trust that had been set up some twenty years ago by his dead partner, allowing him to continue to live in the property until he died. My friend has been lead to believe that although his dad did not own the property it is still seen to be part of his estate and therefore he is now responsible for taxes ext. regarding the property, this can't be right?
Best answers:
- Tell him to see a solicitor.
Led to believe by who? - He was told by the solicitor who is dealing with the trust, does that make sense I'm not familiar with the terminology.
- I think that the situation is that where a life tenant dies, the value of the property does have to be included in their estate for Inheritance Tax purposes.
However, any tax due on that part of the estate would normally be paid from the trust assets rather than the general estate. The two need to be dealt with side by side so that the trust can be wound up as the estate of the deceased is dealt with, and the appropriate amount of IHT gets paid.
I think further explanation to your friend is needed so he should firstly ask for more information from the solicitor involved.
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