Investing £325k trust fund

Bobziz

Hi, I'm looking to invest trust funds of £325k. The funds are likely to be distributed to beneficiaries within 3 years and the trust ended.

Is it possible to invest for capital growth only, for this short period, thus avoiding annual tax returns and income getting hammered by the £1k trust allowance ? If so, which type of products should the trustees be looking at ?

We will obviously be taking independent financial advice, but keen to get an indication of the art of the possible in advance

many thanks.

Linton

Investing as opposed to cash savings would be a seriously bad idea since you may end up with less money than you started with and the beneficiaries could raise concerns. Running a trust fund you must err on the side of caution, act prudently and be seen to act prudently.


So I suggest you look for fixed term savings that mature not long before distribution. Whether a trust fund can access such savings I dont know, your independent advisor should be able to advise.

xylophone

What kind of Trust is this?

https://www.gov.uk/trusts-taxes/types-of-trust

SonOf

Trustees have to be seen to be doing the right thing. And its unlikely that investing the money with under 3 years to go would be considered the right thing. This will almost certainly be best with savings.

Bobziz

xylophone wrote: »

What kind of Trust is this?

https://www.gov.uk/trusts-taxes/types-of-trust

its a NRB discretionary will trust, with settlers children and spouse as both trustees and beneficaries. The deeds enables trustees to manage fund for both capital gain and income generation with the standard provisions on lending to the spouse etc.

Trust needs to be maintained to protect capital from means testing for care fees for spouse now in care home. It was not originally set up for this purpose though.

I'm guessing savings accounts is the way to go, but even that is hard enough finding banks that offer trust accounts.

xylophone

Have you tried NS&I? I believe it is possible for Income Bonds to be held in Trust.

Metro Bank, Natwest and Barclays have been mentioned on the forum as providers of Trustee Bank Accounts.

It would be possible to set up an investment account in the name of Trustees. Example

https://www.hl.co.uk/help/fund-and-share-account/company-fund-and-share-account/trusts/can-i-open-an-account-in-the-name-of-a-trust

Be very sure that you understand the taxation aspect.

Bobziz

xylophone wrote: »

Have you tried NS&I? I believe it is possible for Income Bonds to be held in Trust.

Metro Bank, Natwest and Barclays have been mentioned on the forum as providers of Trustee Bank Accounts.

It would be possible to set up an investment account in the name of Trustees. Example

https://www.hl.co.uk/help/fund-and-share-account/company-fund-and-share-account/trusts/can-i-open-an-account-in-the-name-of-a-trust

Be very sure that you understand the taxation aspect.

Thank you. Really helpful. The paltry interest rate on NS&I income bonds grates on me, but the simplicity and security is appealing. Good to know there are other options too. I'll see what our IFA recommends.