CG65448 - Private residence relief: settled property: payment of rent by beneficiary

If a beneficiary of an express trust pays rent to the trustees to be allowed to occupy a dwelling house which is held by the trust that will not prevent relief under TCGA92/S225. If a trust has a number of beneficiaries but only a single dwelling house occupied by one beneficiary, they may charge rent in order to protect the position of the other beneficiaries. The entitlement to occupy the dwelling house will still come from the terms of the settlement, even though the trustees exercise their discretion to charge rent. This can be contrasted with the application of the trustees managerial powers explained at CG65450-CG65454.

The position considered in CG65448 can be contrasted with the instruction on implied trusts at CG65421-CG65422. If it is suggested that there is an implied trust, whether the individual occupying the dwelling house pays rent can help you to decide whether or not you should accept the existence of such a trust. The existence of an express trust is not in doubt and the payment of rent is, by itself, irrelevant in determining the source of the entitlement to occupy a trust property.