Discretionary Trust and Charity

We have quite an unusual case whereby the sole beneficiary of a discretionary trust is charity. We have little detail on the background.

The trustees wish to remove charity and replace it with family members with a view to making capital distributions

We are trying to ascertain the IHT treatment. Guidance would suggest that:-

  1. The removal of the charity would result in a Flat Rate Charge; and
  2. The value of the settlement would then be regarded as relevant property.

Any thoughts would be most welcome.

Andrew Magilton

The first question is whether the trustees have power to add beneficiaries who arenot charities. It’s not just a tax issue.

Amanda Freeman