Is a life tenant responsible for paying inheritance tax on property that is held in trust?
My client is in his 70s owns his home and has various investments. An inheritance tax liability is anticipated on his total estate. As well as the assets that he owns personally he is also the life tenant of a trust that was created by the will of his late wife. The trust owns a house of which my client has the use for life but it is vacant at present. On his death the trust-owned property will pass to the children of his late wife from her first marriage.
The client is looking to minimise his potential inheritance tax liability something that is not an area on which I have much experience. My understanding is that as the life tenant the trust property will be included in his estate. My question is: who bears the inheritance tax liability on the trust property...
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