Main Residence Trust & Long Term Lease
An equitable right of residence is granted from the trust to a beneficiary, which is sufficient to give an interest in the land that will attract the main residence exemption. If the property is sold in the future, the sale can be structured so that the CGT exemption can be applied.
Furthermore, as a fully discretionary form of trust (provided the trust is appropriately structured), no beneficiary can be said to have any interest in the assets of that trust. That means that if any of the persons who are simply beneficiaries suffer financial calamity or are sued personally, the trust assets will not be available to satisfy the debts of that beneficiary.
For main residences that are already owned by a non-individual (i.e. Company or family trust), a
Upon the sale of the property, the tenant would be entitled to a surrender payment in return for the actual surrender of the tenancy. The payment would be assessable income in the hands of the tenant and provided that the arrangement has been properly structured and administered, would attract the main residence exemption.
The value of the land upon sale, in the hands of the title
Accordingly, the total market value of the interests in the property would be divided between the land value and the lease value. Rent would be nominal so that the
Main Residence Trusts and Long Term Leases can be difficult and complex to setup from a legal and tax perspective. Marsh Tincknell
If you are wondering how to
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