Property Life Interest Trust (PLIT)
This quiet problem, often called ‘sideways disinheritance’, is increasingly common in modern blended families.
Quick-read summary
A PLIT ring-fences each partner’s half of the home so that the survivor can stay safely for life, and later, each half passes to the intended beneficiaries. You can sell, downsize, or upsize with trustee consent; the trust’s proportion follows into any replacement home. If the property is let, net rent is paid to the life tenant. If sale proceeds are invested while searching for a new place, the income and dividends go to the life tenant, while the capital is preserved for the beneficiaries.
Most couples we help hold the home as tenants in common (50–50). Each person owns a separate share that can pass under their Will. By contrast, beneficial joint tenants both own the whole together; on the first death, it usually passes automatically to the survivor and cannot be directed by a Will. A PLIT relies on tenants-in-common ownership; we sever a joint tenancy first if needed.
- Life tenant: survivor with a right to live in the home and receive income.
- Trustees: hold legal title, make significant decisions, protect all parties.
- Ultimate beneficiaries: inherit the trust share when the life interest ends.
- Each Will places that person’s share of the home into trust at the first death.
- The survivor becomes the life tenant and keeps the right to live there for life (or as specified in the trust terms).
- Trustees—often the survivor plus at least one other—hold legal title to the deceased’s share and can agree to a sale, a move, a letting, or a period of investment between homes. Major transactions, including granting a tenancy, require trustee agreement.
- When the life interest ends, the trust share passes to the beneficiaries named in the first partner’s Will.
Between homes — if the house is sold and the trust’s share is invested while you look for a replacement, income and dividends go to the life tenant; capital is preserved for the beneficiaries.
Most couples want two outcomes at once: lifelong security for the survivor and certainty that the first partner’s share will reach the intended beneficiaries. A PLIT does both. It reduces disputes, keeps options open to move or let, and fits cleanly with mirror Wills and Lasting Powers of Attorney.
Mark and Molly own a £400,000 home as tenants in common (50–50). Their Wills create a PLIT so that on the first death, that person’s half sits in trust for the survivor’s lifetime. Mark dies first. Molly stays in the home for a period. She later downsizes, selling for £400,000 and buying for £300,000. The £100,000 difference is split £50,000 each. Molly keeps £50,000 personally. The trust’s £50,000 is invested and pays income to Molly. Several years later, the £300,000 home has risen to £400,000. Because the trust and survivor remained 50–50 on the replacement purchase, the trust’s property share is now £200,000, and Molly’s is £200,000, with the invested £50,000 still producing income. Molly then upsizes to a £500,000 home to be nearer family. Sale proceeds of £400,000 are applied pro rata (£200,000 trust; £200,000 Molly). Molly adds £100,000 of her own funds to complete the purchase. Trustees minute the new apportionment so the ongoing split remains clear. At Molly’s death, the trust’s property share and any trust investments pass to the beneficiaries named in Mark’s Will.
Replacement-home apportionment — if the survivor adds extra personal funds when buying a new home, the trustees minute the split so future shares remain clear.
Amira and Faisal are adult siblings who bought a house together. They want the survivor to remain safely in the home, but also want each person’s share to pass to their own children. Each Will leaves their share into a PLIT for the other’s lifetime. Amira dies first. Faisal stays without pressure to sell. Five years later, he sells and buys a smaller place nearer work. The trust’s percentage follows into the new home, and the restriction on title keeps decisions transparent. When Faisal dies, Amira’s trust share passes to her children as planned, and Faisal’s personal share passes to his children.
Standards and upkeep — typical terms require insurance, council tax, utilities, and reasonable maintenance to be kept up to date.
Jo owns the home outright and wants to protect it for her two children while ensuring her partner, Alex, will always have a home if she dies first. Jo’s Will sets a PLIT over the whole property. Jo dies. Alex has a right to occupy for life, as the trust dictates. After three years, Alex moves to a more accessible property nearby. Trustees sell and reinvest the trust’s proportion into the new home and minute Jo’s children’s remaining interests. When Alex’s life interest ends, Jo’s children inherit the trust’s share, avoiding delay or dispute.
Letting the property — when trustees agree to let the home, the net rent belongs to the life tenant during life.
Priya must work overseas for eighteen months. With trustee consent, the house is let and managed properly. Net rental income is paid to Priya as a life tenant to support living costs. The tenancy ends before her return, and insurance is reviewed; Priya then moves back in. The trust capital remains intact, and the beneficiaries’ position is preserved.
Gareth sells to move nearer grandchildren but the right property takes six months to find. Trustees invest the trust’s share in a suitable portfolio in the meantime. Income and dividends are paid to Gareth as a life tenant during the gap. When the new purchase is completed, the trust capital is released and reinvested in the replacement home. Any personal top-up by Gareth is minuted so that the proportions remain clear.
When Sarah’s wife dies, their five-bedroom house feels too large and full of memories. The PLIT is already in place. Trustees agree to let the family home for £2,000 a month. After costs and taxes, the net rent belongs to Sarah as a life tenant. She uses it to rent a smaller town-centre apartment; the surplus covers her bills and day-to-day expenses. The original house remains as a long-term asset for housing security and, ultimately, for her children as beneficiaries. Sarah can keep letting, move back, or sell in future with a trustee agreement.
With a PLIT, the survivor maintains a secure occupation for life, trustees assist with managing moves or lettings, and the first partner’s share is preserved for the intended beneficiaries. Without it, the whole home usually passes to the survivor outright. Later events—such as new relationships, new Wills, or financial pressure—can send everything to a different destination than the first partner intended.
Can the survivor sell or move?
Can income from investments be used?
Can capital be released early?
What if the survivor later needs care?
A PLIT is an Immediate Post-Death Interest (IPDI). The life tenant has a qualifying interest in possession for inheritance-tax purposes.
Trustees hold legal title. Granting a tenancy typically requires a trustee's agreement and proper management. The life tenant is entitled to the rent (net of costs) but does not usually grant tenancies alone.
Spouse exemption typically applies at the first death. For IHT, the trust share is treated as part of the life tenant’s estate on death. The Residence Nil Rate Band applies only where the home or its proceeds pass to direct descendants.
Trustees take probate value as the base cost. Private Residence Relief can be applied where the life tenant occupies the property as their primary residence. It does not apply to periods when the property is let and not their main home.
The life tenant is taxable on trust income. Trustees may have reporting duties depending on the trust’s activity.
A Form A restriction typically appears on the Land Registry title for tenants-in-common ownership or a trust of land. Replacement purchases repeat the restriction, so all trustees must consent to a transfer or sale. Some trusts must be entered on the Trust Registration Service; we will confirm if registration is required for your case. Apportionments and survivor top-ups are recorded in trustee minutes; title entries focus on restrictions and trustee details rather than percentage splits. Some trusts must be entered on the Trust Registration Service; we will confirm if registration is required.
The life interest ends on the life tenant’s death (or under any earlier trigger chosen when drafting). The trust share and any growth pass to the named beneficiaries without delay.
Clients and executors remain free to choose their own adviser when and if required. We believe this builds trust; clients return to us because of the service we’ve given, not because they are bound in any way.
Is a PLIT right for your family?
If you own a home together and want both:
• day-to-day security for the survivor, and
• some protection for what ultimately passes to your chosen beneficiaries
Then a Property Life Interest Trust (PLIT) is worth exploring as part of your Wills.
Every family and property is different, and a PLIT will not be right for everyone. If you would like to see how this type of trust might work in your situation, please contact Fern Wills & LPAs to arrange a short, no-obligation conversation. We can review your current Wills, how you own your home, and whether a PLIT fits with your wider plans for looking after each other and your family.
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