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When Mr A died in April 1998, his estate included a cottage, valued then at £50,000, which had for many years been occupied rent-free by the family gardener. The cottage was left on trust to the deceased's widow and two sons, on terms that the gardener be permitted to continue to occupy it for the rest of his life, with remainder equally between the widow and the sons. In April 2000, by which time the value of the cottage was £75,000, the widow gave away her prospective interest in the property to the sons. The gardener died in late April 2007 and the cottage is on the market at £350,000.
When Mr A died in April 1998 his estate included a cottage valued then at £50 000 which had for many years been occupied rent-free by the family gardener. The cottage was left on trust to the deceased's widow and two sons on terms that the gardener be permitted to continue to occupy it for the rest of his life with remainder equally between the widow and the sons. In April 2000 by which time the value of the cottage was £75 000 the widow gave away her prospective interest in the property to the sons. The gardener died in late April 2007 and the cottage is on the market at £350 000. I have been asked to advise on the tax consequences of the sale.
It seems clear that for inheritance tax purposes the gardener had an interest in possession in the cottage...
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