Treacy said, explaining that in such a case, the beneficiary receives a " step-up " in basis to the market value of the property at the time of the life tenant's death.
22.
Accordingly, he said, when the property is sold, only the difference between the sale price and the value of the property at the time of the life tenant's death is considered taxable income.
23.
When the life tenant Lord Mount Stephen's died in 1921, Kerr put the estate up for sale and in 1923 it was purchased by Walker Cain Ltd; he was created Baron Brocket in 1933.
24.
The proceeds of sale are apportioned between the life tenant and the remainderman by using the formulae set out in " Re Earl of Chesterfield's Trusts " ( 1883 ) 24 Ch D 643.
25.
With a life estate, she said, the life tenant can live in the property, leave it vacant, or rent it to others, but cannot sell the life tenancy without the consent of the remainderman.
26.
On the other hand " future " property, such as a remainder or a reversionary interest, or other property which at present produces no income, is of no immediate benefit to the life tenant.
27.
In short, as the life tenant's ownership is temporary, failing to maintain or reasonably protect the asset resulting in its diminution in value, or indeed, destruction constitutes a cause of action for the reversioner.
28.
Under the rule in " Howe v Earl of Dartmouth " there may be duty to convert and reinvest authorised investments in the trust fund to maintain fairness between the life tenant and the remainderman.
29.
In a typical interest in possession trust, the life tenant receives all the income from the capital of the trust is paid to another person, known as the remainderman, as specified by the trust document.
30.
Any new husband would on such marriage automatically become the life tenant ( in her right ) of all her lands and the revenues therefrom, including Siston, not just the royal manors of Alveston and Earthcott.
