Trustees of a pre-2006 life interest trust are considering advancing funds (with consent of the life tenant) to a new disabled person trust for the benefit of the remainder beneficiary. I expect this will be considered a resettlement even if the same trustees act.
In this circumstance, am I correct that:
- The original settlor is the settlor of the new trust for CGT purposes under s.68B(3)(a) TCGA
- The life tenant is the settlor for IHT purposes under s.49 & 51 IHTA 1984
- The original settlor is the settlor of the new trust for Income Tax purposes under s.471 ITA 2007
Some of the commentary suggests that, where the life tenant is involved in the resettlement (by giving consent?), any income received by the new trust during the life tenant’s lifetime must be considered to have been settled by the life tenant.