winding up a trust

G_M

Hope this is the best place to post this:

20 odd years ago my mum made a Settlement in trust form for her 2 grandchildren. I am one of 3 trustees. Over the years we have used income to pay for education/university etc. The kids are now in their 20s and employed.

We (3 trustees and 2 beneficiaries) all agree the trust has served its purpose, the capital should be passed to the kids (house-buying on the horizon...) and the trust wound up.

The trust 'period' is defined as 80 years, or until ended by a Deed, so it seems we can end it at any time by Executing a Deed.

Yes, we could go to a solicitor and get one drawn up, but if anyone knows if this can be done simply without that would be great.

There is no conflict, no one to contest it, and no dispute as to how the capital should be distributed.

So we just need a wording for the Deed.

xylophone

http://www.scottishwidows.co.uk/Extranet/Literature/Doc/FP0161
might be worth a look.

Make sure that you understand the tax implications.
http://www.hmrc.gov.uk/trusts/trustee/changes.htm

http://mattersoftrust.wordpress.com/taxation-of-trusts/winding-up-a-trust/

Lansdowne

Note that the last Wordpress link deals with the law in New Zealand so is probably not appropriate here.

xylophone

Note that the last Wordpress link deals with the law in New Zealand so is probably not appropriate here.

Yes, thanks, should have noted this - my eye was caught by some useful reminders which the OP could consider- I should have added "might be worth a look" to the link.

"There are practical matters for a trustee to attend to when winding up a trust

The act of winding up the trust itself is normally the the result of a trustee resolution and may or may not also require a deed to effect the winding up.

Although there are limited if any legal formalities there are practical matters to attend to. These include:

notifying the trust’s bankers that the trust has been wound up and that the trust’s bank accounts should be closed
preparing accounts so that the trustees can make final accounts to the beneficiaries
notifying the IRD that the trust is no longer trading if the trust has an IRD number
filing the final tax return and obtaning in confirmation from the IRD that there are no outstanding tax matters

confirming the registration of any property transfers.
Winding up a trust does not remove any liability a trustee has for tax

The trustee will remain liable for the trust’s tax liabilities following the winding up of a trust. Once the trust’s assets are fully distributed the trustee’s right to indemnity from the trust’s assets is practically limited. For this reason a trustee may wish to seek personal indemnification from the final beneficiaries for any shortfalls or liabilities in respect of any tax obligations, prior to making the final distribution of the trust’s assets. Where a beneficiary will not provide a satisfactory indemnity the trustee can apply to the Court for directions in this matter."

Of course for IRD read HMRC