Estate income from death 2009, Trust of Residue, no Trust Powers

Trusts Discussion
1

A colleague has posed this question:

I’ve taken over a probate file wherein the sole beneficiary is entitled to half of residue when he attains 35 and the other half at 40 (he is currently 31).

I’m just about to wind up and set up the trust but I need to make a decision what to do with the £40K of income that has arisen since date of death (2009).

There are no trustee powers etc in the will so I’m assuming that s31 kicks in and I need to pay the £40K to the beneficiary which I’m sure he will not like receiving in one fell swoop given the tax implications his end!

Any comments on what he can do, or whether the beneficiary just has to lump it would be most welcome.

Fiona Dodd
Mayo Wynne Baxter

2

Shouldn’t the Executors have accounted for tax on the income as it arose, such that the residuary beneficiary will receive any income net of basic rate tax and would only have to account for any higher rate tax that may become due - which would come out of the £40k in any case rather than their own funds…

Maxine Higgins
Citroen Wells