Property Life Interest Trust (PLIT)
Protect your home for your family while keeping full security for the survivor.
Imagine being able to protect your home for your family without ever risking the roof over your partner’s head.
A Property Life Interest Trust (PLIT) does exactly that. It combines lifelong security for the survivor with lasting protection for your loved ones.
Quick-read summary
A PLIT ring-fences each partner’s half of the home so that:
- The survivor can stay safely in the property for life, and
- Each half ultimately passes to the family’s chosen beneficiaries.
It balances day-to-day freedom with long-term protection.
The PLIT protects your home for your family while the survivor keeps full use and security.
You can sell, downsize, or upsize with trustee consent. The trust’s 50% share is transferred to the new property.
Practical checklist
- Used where a couple own their home as tenants in common.
- Each Will places that person’s share of the home into trust upon the first death.
- The survivor keeps the right to live there for life and may move or downsize.
- On the second death, the trust share passes to the chosen beneficiaries.
- Often combined with mirror Wills and Lasting Powers of Attorney.
Why clients choose a PLIT
Most couples want two things at once: lasting security for the survivor and guaranteed inheritance for their children.
A PLIT achieves both — providing control, fairness, and reassurance that every generation is looked after.
Real-life example — Mark and Molly Denton
Mark and Molly own their £400,000 home as tenants in common, with each owning half.
Their Wills create a Property Life Interest Trust so that on the first death, that person’s half passes into the trust for the lifetime of the other.
- Scenario A — Mark dies first: Molly keeps the right to live in the whole home or move. If she sells for £400,000 and buys for £300,000, the remaining £100,000 is divided equally (£50,000 each). Molly’s £50,000 stays hers; the trust’s £50,000 is invested and provides income for Molly for life.
- Scenario B — Later move: If she later buys a £400,000 home, both contribute £200,000 and the 50:50 balance continues.
- Scenario C — Early release: If Molly no longer needs the income, the trustees may, with full agreement and in line with Mark’s wishes, advance some of the trust capital to their son, Charlie. This is exceptional but allowed.
If frequent access to capital is important, a Flexible Life Interest Trust (FLIT) may be a better fit. Both structures cost the same.
At Molly’s eventual death, the trust half (and any growth) passes automatically to Charlie.
Advantages and key considerations
Strong protection
The PLIT safeguards each spouse’s share of the home so it cannot be diverted by remarriage, insolvency, or outside claims.
Lifelong flexibility
The survivor can move, downsize, or upsize with trustee consent. The trust’s share follows the value of the new home.
Trustee involvement
All trustees must approve any sale or purchase. This ensures transparency and family agreement.
The conveyancer handling the sale or purchase registers the replacement home correctly so that each share remains distinct.
Straightforward setup
Owning as tenants in common is a simple, one-off change handled as part of the overall service.
Early capital access
Trustees may release funds if everyone agrees it is appropriate.
Most clients never need to use it, but the option provides comfort.
If regular access is likely, a FLIT may be considered instead.
Care-fee resilience
No trust guarantees full exemption, but the PLIT gives the strongest lawful balance between transparency and protection.
Tax reminder
On the second death, the beneficial interest in the trust’s half is considered within the estate for Inheritance Tax.
Both Nil Rate Bands, including Residence Nil Rate Bands, can apply if conditions are met.
Guidance on this is available if you are unsure.
Frequently asked questions
Can the survivor sell or move?
Yes. The survivor can sell, downsize, or upsize with the trustees’ consent. The trust’s 50 % share follows the property or its replacement.
Is the trust fixed at the first-death value?
No. The proportion, not the cash amount, is what is fixed. If the home increases from £400,000 to £500,000, the trust’s share rises from £200,000 to £250,000.
Can income from investments be used?
Yes. The survivor receives all income from trust investments during life and pays ordinary income tax on it. They may choose to reinvest it.
Can capital ever be released early?
Possibly. Trustees may advance capital to beneficiaries if all agree it is right and consistent with the deceased’s wishes. This is rare but available.
What if the survivor later needs care?
Only the survivor’s personal half of the home is normally assessed. That person does not own the trust’s share and is usually disregarded, often with value discounts where another person remains in occupation.
What happens if the survivor remarries?
The trust keeps the first spouse’s share protected, ensuring it passes to the intended beneficiaries even if the survivor’s personal circumstances change.
Where can I see a full worked example?
For a complete, step-by-step scenario showing how the PLIT operates through real-world events, see the downloadable handout below.
Real-world scenarios
What happens straight after the first death
Trustees sign an appointment record, and a declaration confirms the survivor’s life interest and the trust share. A conveyancer updates the Land Registry title to include the correct restriction.
Siblings co-own and both want security
A PLIT in each Will lets the survivor remain safely while ensuring each person’s share ultimately passes to their own children.
Survivor needs to move for support or to downsize
The survivor may sell, buy elsewhere, or invest proceeds. The trust’s proportional share always follows the value, not a fixed sum.
Protecting young children from early access
A PLIT keeps control sensible. If ongoing flexibility is needed, a FLIT may be more suitable. Both cost the same.
Selling to fund chosen care
Trustees can authorise a sale to release capital for preferred living arrangements or care needs, always with a conveyancer handling the legal work.
Residence Nil Rate Band
If the trust share ultimately passes to direct descendants, the RNRB conditions can be met. If residue is routed via a discretionary trust, additional advice may be needed.
Single-owner arrangement
If only one person owns the home but wants to protect it for a partner, the entire property can be placed under a PLIT.
Family trustees
Beneficiaries can act as trustees. Adding one independent trustee improves balance and avoids conflicts.
Changing or revoking Wills while both alive
You can update or revoke your Wills any time before the first death, provided both have capacity. PLIT clauses take effect only at the first death.
Trustee authority
Trustees must act reasonably and put the life tenant’s housing needs first. Clauses can be written to ensure housing is always the priority.
Remarriage or new relationships
The PLIT keeps the first spouse’s share protected so it cannot be diverted by later partners or financial pressure.
Technical details (optional)
Legal foundation
A Property Life Interest Trust is a form of Immediate Post-Death Interest (IPDI) under the Finance Act 2006. The life tenant has a qualifying interest in possession for inheritance tax purposes.Tax treatment overview
- Inheritance Tax (IHT): Spouse exemption applies at first death. On the second death, the value of the trust share is considered as part of the life tenant’s estate, allowing both Nil Rate Bands and both Residence Nil Rate Bands to apply if conditions are met.
- Capital Gains Tax (CGT): Trustees acquire the property at its open market value on the date of death. Private Residence Relief usually applies on sale if it remains the main home.
- Income Tax: Income from trust investments belongs to the life tenant and is taxed as their own.
Care-fee assessments
The trust’s share is owned by the trustees, not the survivor, and may be subject to valuation discount if another person remains in occupation. Local-authority guidance follows the Care Act 2014 and case precedents such as Chief Adjudication Officer v Palfrey (1995) and later tribunal interpretations, but each case depends on its facts.
Practical administration
Legal title is registered to the survivor and trustees jointly with a Form A restriction to ensure consent from all trustees before sale or transfer. A conveyancer manages this.
When the trust ends
The trust ends at the life tenant’s death. The trust share and any accumulated growth pass directly to the named beneficiaries without further conveyancing delay.
Important note on purpose and ethics
This trust is recommended solely to protect each spouse’s legacy for their chosen beneficiaries while ensuring the survivor is properly cared for.
Any potential care-fee advantage is a consequence, not its design.
All planning complies fully with current law, including the Care Act 2014.
For many couples, the Property Life Interest Trust is the foundation of peace of mind — ensuring that the survivor is safe for life and the family inheritance is protected for the next generation.
