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INDEPENDENT FINANCIAL ADVICE CENTRE
You should remember that past performance is not necessarily a guide to the future. Market and currency movements may cause the value of units, and the value derived from them, to fall as well as rise and you may get back less than you invested when you decide to sell your units. The tax treatment of investments and pensions is not guaranteed and may change in the future.
Your home is at risk if you do not keep up the payments on a mortgage
However, the above arrangement does have its problems and for this reason the legal profession prefers that the trustees have a legal charge (mortgage) on the property instead of owning part of the property. There is no need to arrange any finance as the survivor gives the executors a Loan note for the value of the property that was going to be held in the trust. The trustees then arrange for a charge to be put on the property.
Taking this route allows the survivor full control over the property and avoids potential future taxation problems.
The trustees could waive interest charges and use the accumulated debt to further reduce the estate on the second death but this would lead to a tax charge on the trust (currently 40% as per the IHT charge). The trustees also need to make these arrangements prior to the property being passed to the trust to avoid a stamp duty charge that would arise if the property were first transferred to the trust and then to the survivor.
You need a good solicitor who is familiar with the workings of the above and from our experience their charges will be fairly heavy compared with writing a normal Will.
Taking this route allows the survivor full control over the property and avoids potential future taxation problems.
The trustees could waive interest charges and use the accumulated debt to further reduce the estate on the second death but this would lead to a tax charge on the trust (currently 40% as per the IHT charge). The trustees also need to make these arrangements prior to the property being passed to the trust to avoid a stamp duty charge that would arise if the property were first transferred to the trust and then to the survivor.
You need a good solicitor who is familiar with the workings of the above and from our experience their charges will be fairly heavy compared with writing a normal Will.
WILL TRUSTS
