Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • silvercar
    • By silvercar 18th Jun 17, 10:08 AM
    • 35,867Posts
    • 151,021Thanks
    silvercar
    Is it possible to break a trust?
    • #1
    • 18th Jun 17, 10:08 AM
    Is it possible to break a trust? 18th Jun 17 at 10:08 AM
    Trying to help someone out.

    The deceased has left a pot of money in trust. The stipulation made in the will is that the amount is held for the named offspring of X, but X gets the benefit of the money during their lifetime.

    X has no need for the benefit of the money (I assume this means interest/ dividends etc) and would like to forego this money in order that the offspring could use this money now eg for a deposit on a property. Is this possible? Offspring is over 18 if that is significant.

    Thanks for any insights.
Page 1
    • getmore4less
    • By getmore4less 18th Jun 17, 10:26 AM
    • 29,753 Posts
    • 17,791 Thanks
    getmore4less
    • #2
    • 18th Jun 17, 10:26 AM
    • #2
    • 18th Jun 17, 10:26 AM
    "ending a interest in possession trust early"

    will find references you need

    Relatively simple process but needs the tax situation checking.

    If less than two years then a DOV probably could be used to avoid the trust completely again the tax implications needed assessing especially if X was a spouse/civil partner of the testator as a DOV effects the transferable nil rate band.
    • silvercar
    • By silvercar 18th Jun 17, 11:52 AM
    • 35,867 Posts
    • 151,021 Thanks
    silvercar
    • #3
    • 18th Jun 17, 11:52 AM
    • #3
    • 18th Jun 17, 11:52 AM
    "ending a interest in possession trust early"

    will find references you need

    Relatively simple process but needs the tax situation checking.

    If less than two years then a DOV probably could be used to avoid the trust completely again the tax implications needed assessing especially if X was a spouse/civil partner of the testator as a DOV effects the transferable nil rate band.
    Originally posted by getmore4less
    Too late for a DOV.

    What are the tax implications? X and their offspring are tax payers.
    • Yorkshireman99
    • By Yorkshireman99 18th Jun 17, 12:16 PM
    • 2,950 Posts
    • 2,315 Thanks
    Yorkshireman99
    • #4
    • 18th Jun 17, 12:16 PM
    • #4
    • 18th Jun 17, 12:16 PM
    Too late for a DOV.

    What are the tax implications? X and their offspring are tax payers.
    Originally posted by silvercar
    Without seeing the details of the trust nobody on here can give definite advice. The parties need to consult a specialist I.e. a STEP member. They will be able to advise on the various options.
    • getmore4less
    • By getmore4less 18th Jun 17, 4:58 PM
    • 29,753 Posts
    • 17,791 Thanks
    getmore4less
    • #5
    • 18th Jun 17, 4:58 PM
    • #5
    • 18th Jun 17, 4:58 PM
    Too late for a DOV.

    What are the tax implications? X and their offspring are tax payers.
    Originally posted by silvercar
    You will have to research

    these questions are better posed on the tax board that's where those with current knowledge and experience tend to hang out.

    for will based IIP trusts they can be straightforward.

    typically for a qualifying IIP that forms part of the life tenants estate it becomes PET, with the usual 7 year rules.

    There is also the issue of disposal and CGT which don't apply when the life tenant dies.
    • silvercar
    • By silvercar 18th Jun 17, 6:28 PM
    • 35,867 Posts
    • 151,021 Thanks
    silvercar
    • #6
    • 18th Jun 17, 6:28 PM
    • #6
    • 18th Jun 17, 6:28 PM
    Accept that there may be tax considerations.

    Good to know it can be done. Basically the deceased was trying to protect inheritance for the benefit of future generations. So left money to grand children in trust with their parents (his own children) to have the benefit of the interest of the trust.

    Really he didn't think it through, because had he been alive and wanted to distribute part of his estate prior to his death, he would have been happy for the parent to agree that the grand children to be able to use the money for house deposits.

    The way the trust was set up, the money has to remain in the trust for the benefit of it for the parent.
    • Yorkshireman99
    • By Yorkshireman99 18th Jun 17, 6:37 PM
    • 2,950 Posts
    • 2,315 Thanks
    Yorkshireman99
    • #7
    • 18th Jun 17, 6:37 PM
    • #7
    • 18th Jun 17, 6:37 PM
    Accept that there may be tax considerations.

    Good to know it can be done. Basically the deceased was trying to protect inheritance for the benefit of future generations. So left money to grand children in trust with their parents (his own children) to have the benefit of the interest of the trust.

    Really he didn't think it through, because had he been alive and wanted to distribute part of his estate prior to his death, he would have been happy for the parent to agree that the grand children to be able to use the money for house deposits.

    The way the trust was set up, the money has to remain in the trust for the benefit of it for the parent.
    Originally posted by silvercar
    It is all theoretical without seeing the exact terms of the trust. Beware those who think it is a situation that you can DIY. Paid for professional advice is likely to cost leass than the saving.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

649Posts Today

5,951Users online

Martin's Twitter