Winding up a NRB discretionary trust schem

Gunnersgirl

I am an Executor for my mother's estate and have managed to obtain the grant of probate. However there is a nil rate band discretionary trust debt scheme in the Will which was set up when my father died.

There is actually no IHT payable in the estate in any event.

I am just not sure where I go now before I can sell the house. I think I need to produce something to show the trust has ended but can anyone point me to any examples or books that may cover the subject. I had hoped that I would be able to cut cost and not involve a solicitor for this side of things.

Any help would be appreciated.

xylophone

If you do not know what to to you might be best advised to consult a solicitor experienced in wills and trusts.
http://www.step.org/system_pages/call_to_action_navigation/member_search.aspx?link=header-menu
http://www.draftwill.co.uk/pdfdocs/discretionary_trusts.pdf might be worth a read.

https://forums.moneysavingexpert.com/discussion/3924503 this thread might be of interest.

John_Pierpoint

You might have a problem if any of the trust beneficiaries are minors - they cannot waive their rights.

System

If your father died some years previously and set up the trust there will be trustees, who will have had an obligation to submit annual tax returns.

It is not up to you to wind up the trust. You may be one of the trustees, but all trustees must act unanimously. The trust has a separate legal identity and is has nothing to do with your mother's will or probate.

xylophone

It is possible that the OP and his mother were the only Trustees of the NRB? It is also possible that no returns were needed. See http://forums.moneysavingexpert.com/....php?t=3924503 post 5

John_Pierpoint

Yes but who are the beneficiaries for the next 80/125 years?
Can they all agree to waive their rights?

https://forums.moneysavingexpert.com/discussion/3924503

The legal responsibility of a trustee is to do their very best for the beneficiaries, even when what they have to do is not in their personal interest.

xylophone

http://www.whiskers.co.uk/files/pdf/NILRATEBAND(MAY07).pdf
"DURATION OF THE TRUST
In theory, the Trust could continue for a period 80 years but in practice the Trust will be brought to an end much sooner in accordance with the Letter of Wishes that is usually placed with the Will."
It is possible that the only asset of this Trust is half the family home or a loan arrangement against it.

John_Pierpoint

I have found a similar discussion about ending a discretionary trust on another forum.

The answer boils down to "If it is a "pure" discretionary trust, ie the trustees have absolute discretion over who get what and when, then they can break the trust at any time (subject to possible income and capital tax penalties which will depend on the size ( > nil rate band) and previous income distribution from the trust".

However the wording of the trust may restrict this absolute discretion - for example a trust with which I have been involved states that at least two of the class of beneficiaries must agree to the breaking of the trust.

http://www.taxationweb.co.uk/forum/ending-a-discretionary-will-trust-t38096.html