A discretionary trust owns a substantial property and the terms of the trust include a power to allow any beneficiary to occupy trust property “on such terms as to payment of
rent, rates, taxes and other expenses and outgoings and as to insurance, repair and decoration, and generally upon such terms as my Trustees think fit”.
The question has been posed as to whether, if the trust pays all the property outgoings, including telephone, fuel, etc., those payments would be treated as dispositions for
IHT purposes, and therefore transfers of value. I have found discussion in the IHT manual regarding qualifying IIP trusts and when the payment of property maintenance costs by the life tenant might be treated as an addition to the trust, but nothing the other
way round, nor any discussion in relation to relevant property trusts.
I have some instincts as to what a reasonable approach might be, but should be grateful to learn whether any other forum members have had a similar situation and how they dealt
Diana SmartGordons LLP