Discretionary trust?

Keep_pedalling

As it appears no minors are involved then I think the trust could pretty much be distributed among the beneficiaries as a single payment to each. If this was done I don’t think there would be any need to register the trust, but you probably need to take professional advice first. Hopefully @poseidon1 can supply better advice.

poseidon1

I have to say the various forumites here have been very patient in trying to  obtain relevant information from you to get a meaningful picture of the predicament you and your co trustees are in, by virtue of the will creating two distinct discretionary trusts.

Having finally established that total funds between the settlements total under £200k and all the current beneficiaries are adults, I concur with the consensus here that these are not worth the considerable administrative aggravation of continuing, assuming there are no practical obstacles preventing outright distributions to the various adults within the beneficial class.

However please note the following:

* Since you are clearly unfamiliar with the legal and tax complexities of these trusts, you will require a STEP qualified solicitor to guide you through the practicalities and any relevant documentation necessary to release the trust funds. Since you chose not to share any of the actual trust wording on a redacted basis , and without having seen it, it may prove necessary for  trust deeds of appointments to be prepared and executed to give legal effect to the capital distributions.

* Inheritance Tax compliance - if the trusts are still within the first 2 year period from death of the testator, there should be no IHT exit charge occasioned by the capital distributions. However this is predicated on there having been no IHT liabilty arising on the estate itself, resulting in the trust funds having been conveyed net of an IHT entry charge. If this is an issue the STEP solicitor will advise appropriately.

* Income tax/ CGT compliance - If any post death untaxed income or capital gains arose during the estate administration period, a decision will have to be made as whether any relevant tax liabilties fall on the estate  ( to be taxed at the lower estate rates ) and/or the trusts ( at higher rates ). Much will depend on the effective date the executors deem the estate administration period has ended in favour of the formal  commencement of the trusts for income tax and CGT purposes. The STEP solicitor should be able to assist here also.

The above is a brief snapshot of the issues you should be aware of, if winding up the trusts appears to be an attractive proposition in relieving the trustees of what would be an ongoing administrative burden over the many decades the trusts are empowered to exist. 

rodney2012

Thanks for your advice