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A property protection trust is a will trust that holds your share of a property after you die. You grant your spouse, civil partner, or another person a right to live in the property for life or for a set period. Your trustees keep legal control. Your chosen beneficiaries (often your children) receive the trust asset after the right to occupy ends.
The trust usually applies to your share of the main home. It can also apply to other property, but most people use it for the family house. The aim is simple. You protect your share for the next generation, while you allow your partner to live there without disruption.
You should consider a property protection trust if:
It also helps blended families. If you and your partner each have children, you can secure your own children’s share without forcing the survivor to move out.
For expert advice from our team, just call 01732 525800, send an email to info@protectedlifeplanning.co.uk, or fill out our contact form.
Most couples own as joint tenants by default. That means the survivor gets the whole property automatically. For a property protection trust to work, you usually change ownership to tenants in common. That split allows you to own distinct shares (often 50/50). Your will then places your share into the trust on your death.
The change from joint tenants to tenants in common is called severing the joint tenancy. You register the change with HM Land Registry. You can also use a deed of trust to record unequal shares if you need them.
Your will grants your spouse or another person a right to occupy the home. This is often a life interest or a right of occupation with terms. Common terms include:
A full life interest gives the occupier the income from the trust if the property is let. A right of occupation focuses on living in the home. Your will can set conditions, such as ending the right if the occupier cohabits or remarries, but you should word this with care.
On first death:
On second death or when the right ends:
A property protection trust can reduce the chance that your share is used to fund care for the survivor, because your share sits in trust and is not owned outright by the survivor. Local authorities may still review the setup and the facts. If you created the trust as part of sound estate planning and not to avoid fees at a point when care was likely, the trust has a stronger footing.
The trust also reduces risks from new relationships. If the survivor remarries or makes a new will, your share remains protected for your chosen beneficiaries.
You decide who receives your share in the end. You can direct it to your children, grandchildren, or others. You can exclude or include stepchildren if you wish. The trust ensures your share follows your line if that is your goal.
You need a valid will that creates the trust. The will should:
You may also need:
For expert advice from our team, just call 01732 525800, send an email to info@protectedlifeplanning.co.uk, or fill out our contact form.
For UK inheritance tax (IHT), each person has a nil‑rate band of £325,000. Many estates also qualify for the residence nil‑rate band (RNRB) of up to £175,000 when leaving a home to direct descendants, subject to rules and tapering. A property protection trust can still allow the RNRB, as long as the home passes to direct descendants at or after the end of the life interest and the detailed conditions are met. Drafting matters.
Spouse exemption can still apply. If the survivor has a qualifying life interest, the value may be treated as passing to the spouse for IHT on the first death, but care is needed on structure and wording. On the second death or when the life interest ends, IHT may arise in the usual way by reference to the then value and any available bands.
While the survivor lives in the home under a qualifying interest, principal private residence relief can often protect against capital gains tax on a sale and replacement, provided conditions are met. If the property is no longer the occupier’s main residence, gains can arise. Trustees need advice before letting the property long‑term or holding it after the occupier moves out. Record who lives where and when.
If the trustees sell the home and buy a replacement, Stamp Duty Land Tax (SDLT) applies to the purchase as normal. Higher rates can apply for additional properties, but if the replacement is the occupier’s only or main home and the old main residence is sold, the higher rate may not apply. Check current HMRC rules.
If there is a mortgage, you must check lender consent. Some lenders ask for deeds of consent or will not allow a trust structure without changes. Life cover can help repay a mortgage on first death so the trust is easier to run.
If the trustees sell the home and buy a replacement, Stamp Duty Land Tax (SDLT) applies to the purchase as normal. Higher rates can apply for additional properties, but if the replacement is the occupier’s only or main home and the old main residence is sold, the higher rate may not apply. Check current HMRC rules.
If there is a mortgage, you must check lender consent. Some lenders ask for deeds of consent or will not allow a trust structure without changes. Life cover can help repay a mortgage on first death so the trust is easier to run.
If you want a lighter structure, a right of occupation clause can grant the survivor the right to live in the home for a period, with clear conditions. A full life interest trust goes further and gives income rights as well. Both can protect your share and name final beneficiaries. Your choice depends on how much control and flexibility you need.
The trust depends on owning as tenants in common. Do not skip severance. File the Land Registry restriction so your separate share is clear. If you want unequal shares, use a deed of trust and keep records of contributions. This helps with future tax and clarity between trustees and beneficiaries.
A property protection trust is a will trust that holds your share of a home after you die. Your spouse, partner, or another person can live there for life or a set period. Trustees control the asset. When the right to occupy ends, your chosen beneficiaries inherit.
Usually, yes. Most couples must sever a joint tenancy and become tenants in common so each owns a distinct share (often 50/50). Your will then places your share into the property protection trust on death. Register the severance with HM Land Registry and keep paperwork safe.
It can reduce the risk of your share being assessed for the survivor’s care fees because it’s held in trust, not owned outright by them. However, local authorities can challenge arrangements made to avoid fees when care was foreseeable (deprivation of assets). Early, well‑documented planning is important.
Yes. A sole owner can leave the property to a property protection trust in their will, granting a partner or relative a right to live there and naming ultimate beneficiaries. Consider mortgage consent, running costs, and clear terms for maintenance, sale, and any replacement home. Take advice.
Often, yes. Mirror wills leave everything outright to the survivor, who can later change their will or remarry, risking children’s inheritance. A property protection trust ring‑fences your share, lets the survivor live in the home, and directs capital to your chosen beneficiaries when the occupation ends.
For sensitive, tailored, and fully confidential estate planning services, contact us today. You can reach our friendly team by calling 01732 525800 or sending an email to info@protectedlifeplanning.co.uk
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