Will in Trust

getmore4less

Going to need all three to agree what happens if she does move out.

Any reason to suspect she won't want it sold?

roxytoo

as far as I understand if we do sell it (and I think we are in agreement with that) we then have to invest the money and give her the interest on the money. Its not ours unless she relinquishes her rights to it. My questions was really who pays the bills whilst trying to sell it i.e it has a very large garden so we would have to pay a gardener, who pays the council tax. Its her decision to leave but she doesn't HAVE to relinquish her interest in the trust (which is the house)

getmore4less

trust remains liable so it comes out of any future income.

If there is no money the trust will have to borrow till sold and funds reinvested.

The debt get repaid first from any income

roxytoo

update on this saga. Now looking for tax advice please!! My stepmother decided to move out and buy her own place. Property is now empty and we have decided to rent it and give her the income. But I am confused re the tax situation. Do we pass the full amount of rental income to her and she sorts the tax or does the trust have the tax liability ?

Yorkshireman99

roxytoo wrote: »

update on this saga. Now looking for tax advice please!! My stepmother decided to move out and buy her own place. Property is now empty and we have decided to rent it and give her the income. But I am confused re the tax situation. Do we pass the full amount of rental income to her and she sorts the tax or does the trust have the tax liability ?

Have you taken paid for legal advice on all the legal issues to do with being landlords such as repairs and responsibility to tenants? You really must do this. AFAIK the trustees will be liable for all the outgoings some of which may be allowable against tax. Again paid for legal advice is essential. It would be folly not to do so.

Margot123

Yorkshireman99 wrote: »

Have you taken paid for legal advice on all the legal issues to do with being landlords such as repairs and responsibility to tenants? You really must do this. AFAIK the trustees will be liable for all the outgoings some of which may be allowable against tax. Again paid for legal advice is essential. It would be folly not to do so.

Sound advice as usual from YM99.

We are limited in what we can advise you in such a complex situation. It isn't something many of us have experience of.

A few pounds spent now with a specialist adviser will save you expense and hassle in the future.

Keep_pedalling

roxytoo wrote: »

update on this saga. Now looking for tax advice please!! My stepmother decided to move out and buy her own place. Property is now empty and we have decided to rent it and give her the income. But I am confused re the tax situation. Do we pass the full amount of rental income to her and she sorts the tax or does the trust have the tax liability ?

The trustees are normally responsable for paying the tax.

https://www.gov.uk/trusts-taxes/trusts-and-income-tax

I would pay an accountant to advise and do the tax returns, costs for this should come out of the rental income.

Flugelhorn

also would not pass over the full rental income as would need to pay expenses out of it eg maintenance / gardening / agents fees etc etc

yes, get an accountant

mrschaucer

roxytoo wrote: »

The will states



Gift of Residue

I give the residue of my estate to my trustees upon trust to pay the income thereof to my wife until the distribution date as hereinafter defined

1 upon her death

2 the date when she surrenders relinquishes or compounds the entitlement herein either wholly or partly and if partly then the distribution date shall only apply to that part of the capital of my residuary estate so exonerated from this trust

3 the date of any other event which terminates such entitlement

Just looking at 3) above, was there anything in the will to say what these "any other events" are which terminate the entitlement? It seems odd to have that clause in and then not to be able to use it.

roxytoo

Thanks, I am a landlord already of 2 properties so know the legal side of that. It is a complicated situation and even paying for advice is not easy as there doesn't seem to be a definitive answer. I don't think our solicitor is that good(maybe time to change?) as I think the situation is unique to use and he doesn't seem to know much..........We asked about the 'any other events' bit but it seems that's relative to HER situation. i .e if SHE wanted to do a deed of variance to relinquish her rights to the trust. Re the tax though I understand you don't need to register a trust until there is a tax liability but how do we know if she will have a tax liability? Do we have to see her income?