I need to advise trustees on an 18-25 trust for grandchildren which has substantial assets. The first of the grandchildren attained 25 on 10th April this year and is now entitled to his share. If his distribution happens on say 30th June, is he entitled to his 1/6 share of the value as at April or as at 30th June and does it make any difference if the distribution is in stocks and shares or cash? There is power to appropriate assets in the trust deed. How do we deal with costs, can we reserve an unspecified amount, as there will be costs specifically related to his share, principally the IHT exit charge (a theoretical maximum charge of 4.2%) plus liabilities as at 5th April for the settlement as a whole. The trust deed does not refer to costs. Because the tax pool is insufficient to frank the distribution of all the income to the 6 grandchildren, the income accounts have built up gradually over the years to a substantial amount and the accumulation period ended this year on 2nd April this year. Can the undistributed income be added to the capital accounts now? Presumably all the income needs to be distributed in future even if the trustees incur additional tax?
SHB Solicitors Ltd