I have been given some paperwork for review and would really appreciate any pointers.
Facts are as follows:
Husband dies 2003. Deed of Variation 2004 creating NRB DIscretionary Trust, for family.
Trustees accept IOU for £175K with RPI linking (current estimate of value around £80K) plus bond of around £80K (value remained static) into trust.
There is a letter from the Executors recording their requirement for the property to be transferred to surviving wife and subject to charge. However, property still in joint names of deceased and wife with TIC restriction. As far as I can see, the IOU is a freestanding IOU in the trustees’ hands. Husband’s share of property is, in effect, unadministered.
Income from the bond has been paid to surviving wife since (concern = IIP?). Nothing else has happened, no trustee meetings or reviews, tax returns, or ten year tax return.
My first concern was the tax status of the RPI Linked element of the trust assets. Can anyone point me in the direction on any recent commentary on this?. Presumably it should also have been valued and returned at ten year anniversary.
However, the family currently want to sell the property. Has anyone any thoughts on whether this is straightforward? I understand that if the IOU is secured by way of a charge then it must be repaid upon sale and cannot simply be transferred due to S103 FA (I think). However, if it is not been secured in such a way, are there any other issues to consider upon sale of the property, more than appointing a second trustee? This is the immediate issue.
I am in the process of obtaining further papers but I suspect the picture above will prove to be the case.
Any thoughts much appreciated and thank you in advance.
Jane Huntley
Chadwick’s, Leyland