IHT418 Trusts

Jasminecat_7

Hi, I hope someone can help, this is very basic, and I am trying to navigate these forms.

My parents both set up a 'whole of life' insurance policy in 2001, in trust for the beneficiaries, to mature when they both died, both parents have now both passed.

Also they set up 2 'inheritor Trust funds' in 2010.

Reading the form 418 guidance, it states:

You should only fill in this form if both of the following apply: 

the deceased has the right to benefit from a trust 

you’re acting as an executor or as both executor and trustee  

My question is this:

My parents didn't have a right to benefit from these trusts, they were set up for the beneficiaries, with any value falling outside of the Estate.

I've had conflicting advice from HMRC helpline, one person said no, the other yes. Hence I 'm confused...

Do I still have to complete and return this form? Thank you

poseidon1

Jasminecat_7 said:

Hi, I hope someone can help, this is very basic, and I am trying to navigate these forms.

My parents both set up a 'whole of life' insurance policy in 2001, in trust for the beneficiaries, to mature when they both died, both parents have now both passed.

Also they set up 2 'inheritor Trust funds' in 2010.

Reading the form 418 guidance, it states:

You should only fill in this form if both of the following apply: 

the deceased has the right to benefit from a trust 

yall ou’re acting as an executor or as both executor and trustee  

My question is this:

My parents didn't have a right to benefit from these trusts, they were set up for the beneficiaries, with any value falling outside of the Estate.

I've had conflicting advice from HMRC helpline, one person said no, the other yes. Hence I 'm confused...

Do I still have to complete and return this form? Thank you

Would need to see the precise terms of the so called 'Inheritor Trust Fund', and ensure parents were completely excluded from benefit.

However, please also confirm this Trust fund bears no relationship to  the AIM inheritor  plan mentioned in your previous thread below- 

https://forums.moneysavingexpert.com/discussion/6630263/iht411-aim-inheritor-plans-br#latest

Assuming this is  a separate trust fund entity, did the fund comprise a lump sum insurance based product as the sole trust asset?  If so would need to ensure it was neither a gift and loan plan or discounted gift scheme. Please note even if parents were entirely excluded, because the trust apparently created after 2006 it may have its own IHT compliance issues separate and distinct from your parents estate.

As a general point, when asking these potentially complicated questions it would be wise to provide appropriate  redacted documentation for us to see exactly what's going on. Generally, trusts can be intrinsically complex to comment on at the best of times.

Jasminecat_7

Hi poseidon1
Thanks for taking the time to reply.
I do appreciate this seems a very complex part of the application.
The accounts are WAY GLOBAL BLUE MANAGED PORTFOLIO TRUST ACCUMULATION FUND and
ELITE INCOME TRUST ACCUMMULATION FUND and I cannot identify any exclusion in relation to my parents, in the terms and conditions, which seem extensive.
The AIM inheritor plans I have recorded on the IHT412  and are separate to these.
I think, because I know so little, I will complete the IHT418 to the best I can, provide the schedule, and copy deed in relation to the insurance policy in trust, and allow HMRC to make this call.
Sorry I have not been able provide enough information for you to help, I appreciate you reaching out.

poseidon1

Jasminecat_7 said:

Hi poseidon1
Thanks for taking the time to reply.
I do appreciate this seems a very complex part of the application.
The accounts are WAY GLOBAL BLUE MANAGED PORTFOLIO TRUST ACCUMULATION FUND and
ELITE INCOME TRUST ACCUMMULATION FUND and I cannot identify any exclusion in relation to my parents, in the terms and conditions, which seem extensive.
The AIM inheritor plans I have recorded on the IHT412  and are separate to these.
I think, because I know so little, I will complete the IHT418 to the best I can, provide the schedule, and copy deed in relation to the insurance policy in trust, and allow HMRC to make this call.
Sorry I have not been able provide enough information for you to help, I appreciate you reaching out.

The two entities you have described are/ (were?) Unit trust investments invested in stocks and shares, which if held in the personal name of your mother, would be straight forward investments to be reported on page 2 of IHT  411 supplemental form ( not IHT 418 ).

However you mentioned an Inheritor Trust Fund, so are these two holdings you mentioned assets of this 'Inheritor Trust Fund' ? If so is there an entirely separate trust document with  named trustees (eg family members)  who are supposed to control the trust fund?

Have you received no help or guidance from the advisory firm that set this up for your mother?

You should not be making entries on IHT 418 or any of the IHT supplemental forms if you don't know exactly what you are dealing with. You may end up wrongly declaring assets in your mother's estate that should not be there or vice versa.

If it is your intention to burden HMRC with all the paperwork you cannot decipher, and expect them to advise you whether you have correctly reported all relevant estate matters you are likely to be disappointed. It is not really their job, and they have very limited technical resources even were they willing  to hold your hand in this matter.

If you are unable to provide more detailed information on this forum, I would advise you to consult either a STEP qualified  Chartered Accountant or Solicitor to assist you in understanding what you are dealing with and how the various matters should accurately be reported for probate purposes.


One last point, assuming ELITE INCOME TRUST you mentioned was the same one managed by Way Fund Managers Ltd, the following document indicates it was wound up in 2021 - 
 
https://share.google/1CHPRXIKPlCFWJNG2

If this is correct then it  did not exsist on your mother's death. Were you  nonetheless supplied with a valuation of the holding at date of death and if so who supplied it?

Jasminecat_7

Thank you. 

I thought I could do this and save some time/money but I will seek professional help. 

poseidon1

Jasminecat_7 said:

Thank you. 

I thought I could do this and save some time/money but I will seek professional help. 

I believe that would be wise. Seems your parents were sold packaged tax planning solutions that are now complicating your job as executor.

This forum is an advocate of doing it yourself when estates are simple and straightforward, the little you shared here suggests your parents' estate were not.