Q&As

A trust holds a residential property which is let on commercial terms to Mr and Mrs X. The children of Mr and Mrs X all have a non-qualifying interest in possession in the trust property and have occupied the property in the past. To what extent is Principal Private Residence (PPR) available to the trustees on a disposal of the property?

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Published on LexisPSL on 19/02/2016

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • A trust holds a residential property which is let on commercial terms to Mr and Mrs X. The children of Mr and Mrs X all have a non-qualifying interest in possession in the trust property and have occupied the property in the past. To what extent is Principal Private Residence (PPR) available to the trustees on a disposal of the property?

In answering this Q&A, we have been unable to find any authorities that would support the argument that the children occupy the property by virtue of their interest under the trust, rather than with the permission of their parents as tenants under the lease. Unless the circumstances indicate that the tenancy is subject to the rights of the children, it is likely that HMRC would deny principal private residence (PPR) relief.

However, if the children occupy the property qua beneficiaries at some point during the period of ownership by the trustees, PPR should be available. Moreover, full relief may be avai

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