The short answer is: you can. But “should you?” is the question. I, personally, do not see the advantage. Certainly, you can place it into a trust and after seven years, you place it outside of your estate. But why would you do that? If you were doing it for care home purposes, it's possible that the local authority would raise the objection that this is a deprivation of assets issue, and therefore it wouldn't count anyway. If you were doing it for inheritance tax issues, you would have to pay rent to the trust.

If you placed your property into trust, let's say you place half of it, you then have to get the value of the property for rental purposes assessed, and then you have to pay rent to the trust. So where does the rent money come from? It comes from your taxed income - you pay tax on it once and when the money goes to the trust, the trustees now have to pay tax on the money at 45%. That income could go out to the beneficiaries, and it could be offset the tax so it could end up only being a 20% tax rate, but you still paid two lots of tax. Now, the property is no longer a main residence. So how much of the property is put in? Do you still have your Residential Nil Rent Band allowances available to you? Because, remember, you have to have 175,000 of the value of the property in your name passed to your immediate beneficiaries before you can use the Residential Nil Rate band. But also, that property growth from the day that you gave it into the trust is now allowed with the capital gains tax as well. So, you've got two lots of income tax and capital gains tax. Well, have you saved anything? I don't know that you have. I think you're probably worse off than just leaving it alone.

Generally speaking, rather than putting main residence into trust, life insurance should be looked at. Potentially equity release could be looked at – you take an equity release on the property, give the money away, buy business relief plans, instead. It is much more effective than placing a main residence into trust.