I have a question regarding an Accumulation & Maintenance trust created in 1999.
Principal beneficiaries:
“the two present grandchildren of the Settlor being A & B”
All further grandchildren of the Settlor born in the future other than any born after the first to occur of the following:
a. The date on which A attains 18 years of age; or
b. Expiry of the Accumulation period
This class is now closed as A turned 18 on 11th May 2016. Accumulation period ends on 2nd November 2020.
S31 and s32 apply with the usual modifications. Income payable to the beneficiaries upon the earlier of them attaining 25 or end of the Perpetuity period (79 years from date of trust).
The only change to trust appears to be a change of trustees in 2014. There does not seem to be any attempt to amend the trust following the changes in 2006/2008!
There is also a distinct lack of HMRC correspondence…
Does anyone know whether the changes to A&M trusts in 2006/2008 required the trustees to do anything and if so, can this be done retrospectively?
Also by default would the trust have converted to being a discretionary trust or bare trust?
On the basis that no action was taken by the trustees in the 2006/2008 window, the trust is subject to the IHT relevant property regime.
The trustees would have needed to act to prevent the default position applying, and the relative provisions cannot be invoked retrospectively.
Whilst the trust is subject to the IHT relevant property regime, this does not change the beneficial interests, which remain as set out in the trust instrument.
The due date for periodic charges will be calculated from the date the trust was first constituted (usually accepted as the date of the trust instrument), with a proportionate charge from 6 April 2008 for the first periodic charge due after that date.
The trust will have become relevant property on 6 April 2008. The next ten year anniversary charge after this date will be based on the value at the ten year anniversary, with rate relief for the number of quarters for the period to April 2008.