R85

sneekymum

But Dunstonh, he said it was all sold & paid to him as cash on his birthday.

Doesn't any tax liability fall upon the Trust? (which ended at that point)

The cash lump birthday present is just that. Any interest made since then is counted along with other income to see if he goes over the threshold.


mdb99jh - don't forget to use an ISA.

dunstonh

Sorry, yes i see the bit on the first post saying its in a savings account. I was put off by the following line:

The fund was managed investments in a number of different areas, mainly stock market.

Savings accounts would generate interest which if above your personal allowance would mean that you become a tax payer. There are ways to reduce the impact of that depending on what your plans are for the money.

mdb99jh

Thanks sneekymum, yes I am going to max out my isa allowance for the year (I will be a tax payer in a year and a half so it is worth doing) and then the rest is going into an easy access account. I will find out the exact nature of the trust fund and post back! Thanks to both of you for your help so far :T

mdb99jh

Sorry just to add that the interest earned on all my investments/savings this year, including the trust, will NOT exceed the limit (~£4900) so it is just a matter of whether the lump sum I received counts as income!
Cheers :-)

telly-addict

The lump sum you received is capital and not income. Curious decision to convert it all to cash first - possibly if there is more than one beneficiary and the trustees want to ensure you receive the same cash amount on reaching 25. As previously stated, I would think the trustees have the capital gains tax liability for the sale of the investments.

sneekymum

telly-addict wrote:

I would think the trustees have the capital gains tax liability for the sale of the investments.

which might be why they had to liquidise it in the first place....

Debt_Free_Chick

If the trustees had any tax liability, then they are responsible for it. Any distribution of capital from the original trust should have been made net of the trust's tax liability. Essentially, this should not be an issue for the recipient - it's for the trustees to sort out.

HTH