Trust purchase of first dwelling for beneficiary, beneficiary then buys another dwelling



Elizabeth is the trustee of a settlement trust for the benefit of Frazer in liferent, with the fee to Simon. Elizabeth, as trustee, purchases a dwelling. Frazer is an individual who owns no existing dwelling. As Frazer is entitled to occupy the purchased dwelling under the terms of the trust settlement and this will be Frazer’s only dwelling at the end of day that is the effective date of the transaction, the ADS will not apply. This is the case regardless of whether Simon or Elizabeth own an existing dwelling.

Sometime later, Frazer purchases a dwelling in his own right. At the end of the day that is the effective date of the transaction, Frazer "owns" two dwellings (one in his own name and another, the trust dwelling, in which he has a "relevant interest" and is therefore deemed to be the owner ("deemed ownership")); therefore the ADS will apply to Frazer's purchase transaction.

If Simon goes on to purchase a dwelling, the dwelling owned by the trust (of which Frazer is deemed to be owner ("deemed ownership")) will not be counted when determining how many dwellings is owned by Simon for the purposes of the LBTT(A)(S)A 2016.

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