The Legacy Land Trust can help you benefit from potential inheritance tax (IHT) savings and potential capital gains tax (CGT) savings.
The Trust of Land can remove the property from your estate, potentially saving you thousands of pounds in IHT and CGT.
You can apply a Trust of Land for:
- Property purchased for your children or other family members in the past
- Property where family are on the legal title.
Scenario 1 (CGT Savings)
If the below property is drafted as a Trust Of Land, the CGT will be £0! This could give a huge saving of £56,000* as main residence relief now applies. But it would need to be done before the exchange of contracts in 2015.
If the parents do not wish to benefit from the sale proceeds, having not benefited from the property and their estates are above the Nil Rate Band, the value can be removed from their estates – immediately saving £120,000 in IHT.**
*at CGT rates as at March 2017
** at IHT rates as at March 2017
Scenario 2 (CGT Savings)
If the below property is drafted as a Trust of Land, the CGT liability would be £0! The Trust of Land (Historical) is dated on the day drafted, but confirms the situation from a date in the past.