Q&As

A property is left by Will on a life interest trust. Can the remainderman’s interest be satisfied by an appropriation of cash and is there a time limit for doing so? Does the remainderman’s interest constitute a major interest in a dwelling for the purposes of the stamp duty land tax higher rates on additional dwellings rules?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 04/11/2020

The following Private Client Q&A produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • A property is left by Will on a life interest trust. Can the remainderman’s interest be satisfied by an appropriation of cash and is there a time limit for doing so? Does the remainderman’s interest constitute a major interest in a dwelling for the purposes of the stamp duty land tax higher rates on additional dwellings rules?
  • Acquisition or appropriation of remainderman's interest
  • Stamp duty land tax
  • Summary

A property is left by Will on a life interest trust. Can the remainderman’s interest be satisfied by an appropriation of cash and is there a time limit for doing so? Does the remainderman’s interest constitute a major interest in a dwelling for the purposes of the stamp duty land tax higher rates on additional dwellings rules?

Acquisition or appropriation of remainderman's interest

Under the life interest trust, the life tenant would either be entitled to live in the property or receive the income from it. The first question envisages that the life tenant could acquire the remainderman’s interest in the property and so acquire an absolute interest. The remainderman will receive cash in exchange for their reversionary interest.

If there is no express power in the Will trust for the trustees to alter the beneficial interests, the life tenant and remainderman can agree to vary their interests under the rule in Saunders v Vautier. This is possible if they are both of full age and have capacity. It is not possible if there are any minors or unborns who benefit from the trust. If there are such beneficiaries or potential beneficiaries, application can be made to the court to sanction this under the Variation of Trusts Act 1958. For further guidance on these options, see: Termination of trusts—overview.

It is also possible to execute a post-death deed

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