Nil rate band discretionary trust - tax due after death?

John_Pierpoint

When did the life of a trust get increased from a maximum of 80 years?

(ie trusts created since 20xx ?)

xylophone

Xylophone,

you say you are familiar with Trust investments, but investments in shares or other income producing assets will create a tax liability for the Trust.

This is so easily avoided with 'non income producing assets' which would avoid the need to create tax returns each year for the Trust, which are costly and non essential if other investments are considered when the Trust is being created.

Sam

Indeed! I am aware - did you read my post "In a Trust with which I am familiar, cash was in the Trust and initially used to buy shares/funds etc which yielded an income. Naturally the Trust tax return had to report this. These were subsequently sold and the proceeds used to make an interest-free loan to a beneficiary.

Once the Trust had no income, HMRC advised that no return would be required until it did."

See also post 2.

You will also note that I said "a Trust with which I am familiar" - I am not a Trustee of this particular Trust so had no say in its administration or investment choices - I was simply giving some information about the way it was administered.

xylophone

The first link is a mixture of two links and thus does not connect to anything.

Thanks- I have deleted faulty link.

SeniorSam

John_Pierpoint wrote: »

When did the life of a trust get increased from a maximum of 80 years?

(ie trusts created since 20xx ?)

??? The Trust was created in 2003. It has a life of 80 years if required. Not longer.

Sam

SeniorSam

xylophone wrote: »

Indeed! I am aware - did you read my post "In a Trust with which I am familiar, cash was in the Trust and initially used to buy shares/funds etc which yielded an income. Naturally the Trust tax return had to report this. These were subsequently sold and the proceeds used to make an interest-free loan to a beneficiary.

Once the Trust had no income, HMRC advised that no return would be required until it did."

See also post 2.

You will also note that I said "a Trust with which I am familiar" - I am not a Trustee of this particular Trust so had no say in its administration or investment choices - I was simply giving some information about the way it was administered.

I did read your post. I was simply pointing out that investing in income producing assets is unwise when other investments are available. Correctly, any income need to be reported in a tax return, which incurs additional costs for the Trust.

Just trying to be helpful with the knowledge I have gained over many years directly connected with Trusts. No offence was intended.

Sam

xylophone

No offence was intended

.

None taken!:)

John_Pierpoint

SeniorSam wrote: »

??? The Trust was created in 2003. It has a life of 80 years if required. Not longer.

Sam

Yes but I was wondering for the benefit of the rest of us, including my DW, if you could expand on the longer life for trusts that has been introduced for trusts established after 2003 ?

SeniorSam

Hi John,
This may be where you need someone with more knowledge.

As far as I was aware, a Trust has a life no longer than 80 years from inception. The Trustees of that Trust may decide to create additional Trusts within their administration.

I am not aware of any Trust changes in 2003 regarding the creation of a longer life Trust. If you can tell me where the information you have on this comes from, I would be interested in the information.

Sam

John_Pierpoint

Google has found it:

http://en.wikipedia.org/wiki/Perpetuities_and_Accumulations_Act_2009

Perpetuity period
(1)The perpetuity period is 125 years (and no other period).
(2)Subsection (1) applies whether or not the instrument referred to in section 1(2) to (6) specifies a perpetuity period; and a specification of a perpetuity period in that instrument is ineffective.
http://www.legislation.gov.uk/ukpga/2009/18/section/5/enacted

The Act generally applies to instruments taking effect on or after the commencement day, but there are two classes of instrument to which the Act (other than section 12) does not apply even though they take effect on or after the commencement day. They are—wills executed before, but taking effect on or after, the commencement day; and instruments taking effect on or after the commencement day which are made in the exercise of a special power of appointment, where the special power was created by an instrument which took effect before that day.

http://en.wikipedia.org/wiki/Rule_against_perpetuities

SeniorSam

Thanks John,

I see this may apply to some Wills drawn up after April 2010, which is about when I retired.

Sam