CIOT comments to HMRC on Finance Bill 2016 Clause 35 - Distributions in a winding up
However the published version of the bill does not cover the situation when the home is held as a trust interest (for example an Immediate Post-Death Interest (‚ IPDI‚ )). The typical scenario would be that the home (solely owned by husband) was left on a life interest basis to his widow, with remainder over to his children. The widow goes into care and the trustees wish to sell the property. An IPDI is becoming increasingly common to safeguard the interests of children from a first marriage when their parent enters into a second.
The omission is that a disposal by trustees of the dwelling-house in which the person has an interest in possession is not a disposal by ‚ the person‚ , and so cannot qualify. We suggest an approach to drafting which would enable the policy objective to be met.