How can I get the best return on money held in a Discretionary Trust?

Gillyc_3

Hi,
Unfortunately I have inherited a substantial amount of money, which is held in a Discretionary Trust with my brother and I as Trustees & myself as Beneficiary. At the moment it is in a 2 year 'High' Interest Deposit Bond with HSBC earning a pathetic 0.92% interest. I have looked everywhere for a product that will earn me more interest, but nobody seems interested in money held in trust. Do any of you good people know where I can invest my money better, so that I don't feel like I'm being ripped off? I'd rather have instant access to my money if possible, but don't really mind locking my money away for 2 years, maximum.

Thanks in advance,
Gillyc

Your_Hero

How much is it and why is it still in a Discretionary Trust assuming you and your brother are of adult age to receive the funds?

Gillyc_3

Hi, yes we are both of adult age. The money is in a Discretionary Trust following the advice at the HSBC. I am disabled & receiving ESA while I look for work, therefore I am only allowed £6,000 in savings before this is taken off me. It's just a way of protecting it as it is not deemed legally mine if it's held in a Discretionary Trust. There is over £43k in the Trust.

Thank you.

xylophone

There is nothing that prevents a Discretionary Trust having adult beneficiaries - indeed, sometimes this is a deliberate decision by the settlor to prevent the beneficiaries from having control to spend as they like!

Even though in this case one of the Trustees is also a beneficiary, because there is another Trustee and the Trustees have to be in agreement, there is a brake on how the money will be disbursed.

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

http://www.grant-thornton.co.uk/en/Thinking/Trusts-and-tax--are-discretionary-trusts-still-relevant/

If legal advice is required then a specialist solicitor may be required

http://www.step.org/online-directory

Regarding the taxation of a DT see http://www.hmrc.gov.uk/trusts/types/discretionary-accum.htm

With regard to the investment of the monies, it is perfectly possible to set up investments in the name of X and Y, Trustees of the ABC Trust.

Example http://www.hl.co.uk/investment-services/fund-and-share-account/faqs

It is also possible to set up deposit accounts in trust - examples

https://www.caterallen.co.uk/term-deposit-account-for-trusts

http://www.ybonline.co.uk/business/our-products/savings/notice-account/notice-account-for-trusts/

Some building societies may allow fixed interest bonds to be held in trust - this needs to be discussed with the individual society.

If there is a substantial sum of money involved, it would be worth obtaining the advice of an Independent Financial Adviser with experience of investments for trusts and the taxation of trusts?

https://www.unbiased.co.uk/

xylophone

I am disabled

Should this have been a Trust for a vulnerable person?

Disabled Discretionary Trust? http://www.primewills.co.uk/will_writers_cambridge.htm

http://www.hmrc.gov.uk/trusts/types/vulnerable.htm