TSEM6361 - Legal background to trusts and estates: death of a life tenant

On the death of a life tenant, trustees are deemed to have

  • disposed of the settled property, then
  • immediately re-acquired it at market value.

Assets cease to be settled property

»Ê¹ÚÌåÓýapp trustees are regarded as bare trustees (TSEM6272). »Ê¹ÚÌåÓýappy act for whoever became absolutely entitled to the trust property. »Ê¹ÚÌåÓýappy can hand over the assets after paying any inheritance tax due. For CGT purposes, the beneficiary is regarded as absolutely entitled from the date of death (CG36454 onwards).

»Ê¹ÚÌåÓýappre is a clawback of any held-over gain (CG36510). Apart from that, there is no CGT charge on property that was subject to the life interest.

Assets continue to be settled property

»Ê¹ÚÌåÓýappre is a clawback of any held-over gain (CG36510). Apart from that, there is no CGT charge.
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