Beneficiary under Trust purchases dwelling, Trust already owns dwelling

 

Example:

Alex, the trustee of a discretionary settlement for the benefit of individuals, Nicholas, Paul and Robert, purchases a dwelling as trustee. None of the beneficiaries have a right to occupy the dwelling under the settlement trust, nor can they require Alex to pay them any income from the dwelling.

As there are no beneficiaries with a relevant interest in the trust dwelling, the ADS will apply. Six months later, Nicholas purchases his first dwelling. At the end of the day that is the effective date of the transaction, Nicholas owns one dwelling and, because his possible future benefit from the trust does not amount to a relevant interest in any dwelling, the ADS will not apply.

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