Tax implications of giving money to someone's Discretionary trust?

Shrapnel

Hi everyone,

I'm new here, so I hope this is the correct place to post this question. It's rather specific but I'll try to explain and keep it simple.

My sister has severe learning dificulties and has a Discretionary Trust for some of her finances to keep them away from local government etc. She does not have the capacity to manage her finances herself.

I'm about to inherit a sum of money. Could I give her some money and put it into her Discretionary Trust? (Assumuing I don't die in the next 7 years) would there be tax to pay on the gift? It could be in the regeon of £20,000.

Thanks in advance.

Mr_Taxtastic

Gifts to a Trust are chargable life time transfers and as such there is a potential for 20% tax to be charged.
If gifts you have made to trusts in the last 7 years exceeds the current nil rate band (currently £300,000) then tax will be payable.

If the total gifts over the last 7 years are under this limit then no tax is payable.