What is the Trustee of a Trust required to do ?

Murphy_The_Cat

Please be gentle with me and if possible explain things to me in Laymans Terms.

A relative of mine passed away a while ago and amongst other things, left a sum to be kept in Trust, with my Mum being allowed to take any interest/income from it (if she wants to), with me being named as Trustee.

When my Mum passes on, the Trust will then get wound up and the balance will be divided between my sister and I. (my sister doesn't live in the UK)

I have very little knowledge of Trusts and similarly little knowledge of being a Trustee.

Am I on the right lines that I could open an account with say HL, as a Trust (I imagine that I'd need to supply the Trust Deeds etc).

Invest in a way thats deemed to be appropraite, say a Worldwide Tracker fund, as an Income fund, with any Income that is generated going to my Mum (or reinvested in the Tracker fund if she genuinely doesn't want it).

How are the relevant taxes paid across to HMRC ? Does the Fundhouse (say HL) provide a Tax Certificate which is then for me as a Trustee to pay from the Trust Funds or are charges taken from the Trust Fund automatically.

Is this something that I can do as a Sole Trustee, or do I need someone else/others to join me as Trustees ?

I don't want to make a hash of things and want to make sure that HMRC get their relevant pound of flesh, but I also don't want to sadlle the Trust Fund with unneseccary charges.

I'm on a steep learning curve here and as ever, all thoughts are gratefully rec'd.

xylophone

Read through the whole of  https://www.gov.uk/trusts-taxes/types-of-trust for details of tax as applied to different types of Trust/how pay tax/tax cert for beneficiaries etc. - if you are not sure of the type of trust, ask the solicitor who drafted the Deed. Read the Deed very carefully.

http://www.estatesortrusts.co.uk/responsibilities-of-a-trustee.html
https://www.leonardgray.co.uk/download/Guide-to-Trustees-Powers-and-Duties.pdf

It is possible to set up a Trustee account with  HL (and no doubt other  providers).
The Trust will also require a current account - try Metro Bank or Natwest.

Murphy_The_Cat

xylophone said:

Read through the whole of  https://www.gov.uk/trusts-taxes/types-of-trust for details of tax as applied to different types of Trust/how pay tax/tax cert for beneficiaries etc. - if you are not sure of the type of trust, ask the solicitor who drafted the Deed. Read the Deed very carefully.

http://www.estatesortrusts.co.uk/responsibilities-of-a-trustee.html
https://www.leonardgray.co.uk/download/Guide-to-Trustees-Powers-and-Duties.pdf

It is possible to set up a Trustee account with  HL (and no doubt other  providers).
The Trust will also require a current account - try Metro Bank or Natwest.

Thank you (once again) xylophone for your links.

The solicitor I'm using is very obliging to my requests for help/clarification, as well as being eye wateringly expensive !

dunstonh

Invest in a way thats deemed to be appropraite, say a Worldwide Tracker fund, as an Income fund, with any Income that is generated going to my Mum (or reinvested in the Tracker fund if she genuinely doesn't want it).

You may find the suitability test a struggle.   Its higher risk than you would normally expect trust arrangements to be set up for and a global tracker is not really suitable for an income objective unless you are using total return with fixed regular withdrawal and a cash account to cover around two years income.

Often offshore bonds (and sometimes onshore) are used for trusts for tax reasons.  What tax wrapper were you planning to use as I don't think HL has offshore bonds on their platform?

xylophone

as well as being eye wateringly expensive !

Someone's got to pay for his little luxuries.....

Murphy_The_Cat

dunstonh said:

Invest in a way thats deemed to be appropraite, say a Worldwide Tracker fund, as an Income fund, with any Income that is generated going to my Mum (or reinvested in the Tracker fund if she genuinely doesn't want it).

You may find the suitability test a struggle.   Its higher risk than you would normally expect trust arrangements to be set up for and a global tracker is not really suitable for an income objective unless you are using total return with fixed regular withdrawal and a cash account to cover around two years income.

Often offshore bonds (and sometimes onshore) are used for trusts for tax reasons.  What tax wrapper were you planning to use as I don't think HL has offshore bonds on their platform?

I'm very, very early on this process and trying to find out as much as I can before I'm formally "given the job".

xylophone said:

as well as being eye wateringly expensive !

Someone's got to pay for his little luxuries.....

In general, I don't begrudge his fees, as he'd doing things that I'm unable to do - but I wouldn't complain for long if the charges per hour started with a 1, rather than 2 !

Alexland

In addition to thinking about your mother's income needs (is she happy with whatever dividends the stock market spits out or would she prefer a smother and more predictable flow?) you also need to think about looking after your sister's eventual proportion (would she be happy if you hand over less money after a stock market crash?).

Murphy_The_Cat

Alexland said:

In addition to thinking about your mother's income needs (is she happy with whatever dividends the stock market spits out or would she prefer a smother and more predictable flow?) you also need to think about looking after your sister's eventual proportion (would she be happy if you hand over less money after a stock market crash?).

Thats a very good question and one that I'll need to ask her when I get an opportunity.

Not easy when she's in lockdown in another country and money matters don't really have any attraction for her !

xylophone

Another thought  (although on the gloomy side)- if this is an "interest in possession" Trust, type  Tolley death of beneficiary of life interest trust into Google and have a look  at the guidance.

Murphy_The_Cat

xylophone said:

Another thought  (although on the gloomy side)- if this is an "interest in possession" Trust, type  Tolley death of beneficiary of life interest trust into Google and have a look  at the guidance.

Oh unrestrained Joy and Bountiful Happiness !  Thank you for the suggestion.  More stuff to scramble my brains.

My life is quite full of "complications" at the moment and it appears that anther one has just popped up over the parapet and is waving at me.

My sister doesn't know how lucky she is avoiding all of this - his contribution to date has been confirming her bank details for the incoming wonga.

xylophone

money matters don't really have any attraction for her !

Well.......

contribyution to datehas been confirming her bank details for the incoming wonga.

But (all being well) it'll be a long time coming?