Life tenant Definition

Case studies

"We have to become more agile as our clients' expectations and requirements change. The only thing we know is that tomorrow is going to be different and we must be prepared. With ��Ӱ��, I feel more confident of that we're ready every time."

Wolverhampton County Council

Access all documents on Life tenant

GET ACCESS NOW

GLOSSARY

Published by a ��Ӱ�� Private Client expert

What does Life tenant mean?

A beneficiary entitled to the income of the trust fund for life or to the use of trust assets.

The life tenant is not entitled to capital held for the beneficiaries in remainder on the termination of the life interest. Put very simply, income is payable to A for life and on A's death B receives the capital. The beneficiaries may be named within the clause or defined terms may be used.

Private Client and Trusts

A beneficiary entitled to the income of the trust fund for life or to the use of trust assets.

Speed up all aspects of your legal work with tools that help you to work faster and smarter. Win cases, close deals and grow your business–all whilst saving time and reducing risk.

Creation of trusts—life interest trusts

The nature of a life interest trustIn its basic form the life tenant is entitled to income produced by the trust fund or to the use of trust assets. The life tenant is not entitled to capital held for the beneficiaries in remainder on the termination of the life interest. Put very simply, income is payable to A for life and on A's death B receives the capital. The beneficiaries may be named within the clause or defined terms may be used.The term 'interest in possession' has been considered to include:•life interest trusts•any trusts under which a beneficiary has an immediate right to income as it arisesReasons to consider using a life interest trustThe motive for creating a life interest trust is usually the desire to:•protect the capital,•ensure that it devolves on A's death to B•provide an income to a beneficiary eg because they are a spendthriftIt is common to give added flexibility by enabling the trustees to terminate the interest in possession and to apply capital and income for...

Contents of Wills—rules of apportionment

The rules of apportionment should be considered at the moment of drafting the Will. Whenever a Will creates a trust, some rules of apportionment may be applied or excluded unless they have been dealt with expressly in the wording of the Will.Essentially, the purpose of the apportionment rules is to strike a balance between those interested in the capital of the trust (the remaindermen) and those interested in the income derived from that capital (the life tenant). These rules have been set out in cases and by statute.In the main, the reasoning behind the rules was that a testator, had they thought about it, would probably have wanted the trustees to maintain that balance. Therefore, equity intervened to presume that intention on behalf of the testator. As the principle of apportionment was always to be presumed, there was no necessity to seek any evidence of intention to include the rule (although evidence would be needed to dispel the presumption).Trusts (Capital and Income) Act 2013The relevance of the rules had been...

Discover our 12 Practice Notes on Life tenant

Explanatory note for a client's Will—to spouse on flexible life interest trust with remainder on discretionary trust

Explanatory note for a client's Will—to spouse on flexible life interest trust with remainder on discretionary trust STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime. Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of the rules determining excluded property status, the abolition of protected settlements status of offshore trusts, and changes to overseas workday relief. For information on these changes, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. [Your] Will—[name of testator]—explanatory note This explanatory note explains the main provisions of your Will. Please read this explanatory note and your Will carefully....

Will—unmarried, divorced, separated with children, no partner

Will—unmarried, divorced, separated with children, no partner STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime. Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of the rules determining excluded property status, the abolition of protected settlements status of offshore trusts, and changes to overseas workday relief. For information on these changes, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. 1 Revocation I [full name of testator] of [address of testator] revoke all former testamentary dispositions made by me[ to the extent that and so far only as they affect my property of every...

Dive into our 6 Precedents related to Life tenant

If the life tenant and remainder beneficiaries of a trust jointly resettle the trust fund, who would be treated as the ‘settlor’ for the purposes of the income tax settlements legislation? Could the original remainder beneficiaries be potential beneficiaries under the new trusts without the settlements legislation applying?

If the life tenant and remainder beneficiaries of a trust jointly resettle the trust fund, who would be treated as the ‘settlor’ for the purposes of the income tax settlements legislation? Could the original remainder beneficiaries be potential beneficiaries under the new trusts without the settlements legislation applying? For the purposes of the income tax settlements legislation in England and Wales, a ‘settlor’ is defined broadly. According to section 620 of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), a settlor is any person by whom the settlement was made. This includes individuals who have provided funds directly or indirectly for the purpose of the settlement, undertaken to provide such funds, or entered into reciprocal arrangements with another person to make or enter into the settlement. Furthermore, HMRC guidance indicates that the settlements legislation can apply even if the settlor or their spouse or civil partner does not receive any benefit from the settlement income, as long as there is a possibility that they may benefit. The...

How is a Will trust with joint life interests treated on the death of one of the life tenants for inheritance tax purposes?

How is a Will trust with joint life interests treated on the death of one of the life tenants for inheritance tax purposes? The precise terms of the Will trust will determine what happens to the wife's life interest and the tax treatment of the trust property on her death. We refer you to the following content which you may find useful in your research: Overviews: • Trusts—inheritance tax—overview • Trusts of land—overview Q&A: • Two persons, A and B, have a joint qualifying interest in possession in the trust property. On the death of the first life tenant, how is their

See the 2 Q&As about Life tenant

Top

Trial

��Ӱ��

GLOSSARY