Hi, I have a client who as sole trustee will be required to carry out the 10 year charge review on a family trust later this year. The original trust property value is under the RNRB but further settlement of some shares took place 5 years ago which pushes the total value over the threshold. My question is does the review only cover the settled property in the trust as part of the original trust property, or, does it have to include all trust property on the anniversary of the trust, including the more recently settled shares?
I would suggest that if questions at this level are being asked (this is basic stuff if you do trusts and is easily found in the HMRC manual with a quick search https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm42081 , your client appoints a trust specialist to undertake the ten-year charge work. It does not have to be solicitor, but it needs to be someone who specialises in trusts.
The RNRB is irrelevant.
This question also makes me wonder about how the administration of the trust generally is being dealt with. I would strongly suggest that the trustee appoints an ongoing advisor for the sake of the beneficiaries and for himself.
I would also suggest that your client takes appropriate legal advice on appointing another trustee, again for the sake of the beneficiaries and for himself.
Any trust that I have seen that has been administered by lay trustees with no ongoing professional input (and I am not saying that has to be a professional trustee) has been a mess.
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The TYA charge will be affected by the value of the added property at the anniversary, with an allowance for the fact that it has not been settled for all the 10 prior years.
A typical problem caused by a later addition is that the settlor”s cumulation will then include the initial transfer into the settlement and any other transfers since then and before making the addition: s.67 IHTA. It may be preferable for a settlor to make a separate settlement rather than an addition to the pre-existing trust.
Jack Harper
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As often happens, it seems I am not the first kid on the block and so have responded without first seeing the previous reply or replies. Sorry!
I have commented elsewhere on here about the acceptable basis (in my personal view) on which questions are and should be posed to us; and I reiterate my instinctive support for Sara’s laser-like excoriation of some querists who seem either bewilderingly naive or cynically exploitative. (Not always clear). This Forum is surely not a buckshee quasi-AI facility for anyone who secures sign-up access.
The query on this thread is as blatantly basic as it could possibly be; even our dog could have been quickly trained to advise on it. No one purporting to advise paying clients should need help with the answer (I intend no personal offence).
My decision is that I will no longer reply to seemingly disingenuous queries from those who, so I judge in default of guidance, are apparently trying to conduct their professional practice by using this Forum brazenly as a cost-free technical practice resource. This may sadly inconvenience some genuine students or newbies genuinely seeking some deserved support along the path we have all once travelled, and I regret that.
If you look in depth at the tell-tale frequency and apparent technical naivety of some excessively regular questioners, I wonder whether it is appropriate for me to further indulge their antics with a considered response. Two such questioners are so flagrant in taking their pitcher repeatedly to the well that we are practically their on demand no-charge tame Counsel. Others can of course choose for themselves how they react; I am going to be more discerning in future. I will no longer reply to those engaged in my view on urine extraction.
Jack Harper