CGT query

Jeremy535897

poseidon1 said:

I agree with Jeremy535897, the way in which you as trustees have administered the trust and the income arising, points to this being an interest in possession arrangement for him.

However you definitely must get professional advice about your mum's codicil which appears to be the operative trust instrument.

I do not like the sound of the expression ' it creates a discretionary trust' 
Hopefully this is something that only occurs on your father's death ( so a problem for another day), but it is perfectly possible for discretionary trustees to carve out intermediary interests in possessions for a particular beneficiary, with the carved out trust capital falling back into the original discretionary trust on the happening of a specific event ( such as death ) - I have personally been involved in such trusts where this was done. Best to make sure this is not case here, your original contention that you are dealing with a discretionary trust is worrisome in this regard.

I agree. A discretionary trust with a post 2006 interest in possession carve out is still relevant property subject to the 10 year and exit charge regime. it is vital to understand what is in existence. 

Bookworm105

and in case the significance of the 10 year limit is new to you, the emphasis placed on it by Jeremy and Poseidon is because a discretionary trust is subject to it. Therefore on the 10th anniversary of its set up charges have to be paid and again when assets "exit" the trust

in contrast, an interest in possession trust is excluded from that, so it is important to be sure what type of trust exists 

background info here: Trusts and Inheritance Tax - GOV.UK

Jeremy535897

Bookworm105 said:

and in case the significance of the 10 year limit is new to you, the emphasis placed on it by Jeremy and Poseidon is because a discretionary trust is subject to it. Therefore on the 10th anniversary of its set up charges have to be paid and again when assets "exit" the trust

in contrast, an interest in possession trust is excluded from that, so it is important to be sure what type of trust exists 

background info here: Trusts and Inheritance Tax - GOV.UK

Yes, so long as it was created on death, or predates the rule change in 2006.

Bookworm105

Jeremy535897 said:

Bookworm105 said:

and in case the significance of the 10 year limit is new to you, the emphasis placed on it by Jeremy and Poseidon is because a discretionary trust is subject to it. Therefore on the 10th anniversary of its set up charges have to be paid and again when assets "exit" the trust

in contrast, an interest in possession trust is excluded from that, so it is important to be sure what type of trust exists 

background info here: Trusts and Inheritance Tax - GOV.UK

Yes, so long as it was created on death, or predates the rule change in 2006.

as mentioned in the link provided