Commentary

I12.419 'Double trust' or 'lifetime debt' schemes

IHT, trusts and estates

I12.419 'Double trust' or 'lifetime debt' schemes

I12.419 'Double trust' or 'lifetime debt' schemes

The steps involved in a typical 'double trust' scheme are discussed at I12.309. The application of Sch 15 (which is not as straightforward as it is in the case of some of the other well known arrangements) can be summarised as follows:

  1.  

    (i)     The chargeable person continues to occupy the land in question, thus fulfilling the requirement in paragraph 3(1)(a).

  2.  

    (ii)     The sale of the property to the trustees might be thought to be an excluded transaction; after all, the purchase price is generally the full market value of the property. However, the chargeable person and the trustees are 'connected' for the purposes of Sch 15 and it is therefore necessary to consider whether the transaction is such as might be expected to be made at arm's length between persons not connected with each other. The terms of the debt on which the purchase price is left outstanding vary, depending on the version of the scheme which has been implemented; in some (early) cases the debt may be interest free and repayable on demand, in others interest free and repayable on the death of

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