Paying Tax on a Trust Fund

Hooner74

Hello all. This is my first post so please be gentle.

My mother & father set up a with profits trust fund for myself approx 20 years ago. It has now matured and due to "pay out" in the region of £50k.

Does anyone know if I have to pay tax on this money or will this have been taken care of with tax on the interest over the 20 years it was in trust? My mother is still alive and kicking if this makes any difference.

I plead total ignorance in all things tax and I've never had to think about it before. (PAYE is a wonderful thing):o

Many thanks in advance
Hooner

dunstonh

What type of trust was it?

Hooner74

All I know was that it was a "with profits" trust. What types of trust are there?

yelf

No such thing as a With Profits trust. With Profits is a type of investment fund. Different trusts: http://www.hmrc.gov.uk/trusts/types/index.htm

Hooner74

OK. Erm, I think I'll have my mum look through her papers as she won't have a clue. She can't remember where she put her glasses, nevermind what type of investment/trust she started 20 years ago:rotfl:
Out of interest, if it was just an investment which she had decided was to come to me after 20 years (ie not a legal trust) could she gift it to me without being taxed (assuming nothing happens to her in the next 7 years)?

Anyhow, I'll be back once i have more info.

Many thanks

yelf

If its just an investment (ie no trust) then there would be no tax to pay (potentially there could be IHT if she died within 7yrs though). Thinking about it, it could be an Investment Trust which is invested in with profits. An Investment Trust is a collective investment (like a unit trust or OEIC), so that may be what it is

John_Pierpoint

Could it be an life insurance policy "with profits" written in trust?

dunstonh

Its likely it to be life funds in trust but there are many different trusts available. Especially 20 years ago. The type of trust dictates the maturity process and tax issues.